The Original Fintech Factoring Company

Fintech Factoring vs Traditional Accounts Receivable FactoringEveryone knows that accounts receivable factoring has been around for a while, in fact, if it wasn’t for factoring, in fourteen hundred and ninety two, Columbus wouldn’t have been able to sail the ocean blue. However, in recent years, in response to rapidly developing technology and an unwillingness by banks to lend money, a large number of fintech companies have emerged offering entrepreneurs a variety of ways to raise money for their businesses. These fintech companies offer everything from crowdfunding to factoring. However, it is important that you compare the services that these new fintech companies provide as well as the fees they charge to more established funding sources.

Crowdfunding vs Venture Capital

Crowdfunding is indeed an excellent alternative to venture capital. Companies like Kickstarter and Indiegogo allow start-ups to raise money for their business through pre-sales, rather than receiving loans or giving up a percentage of ownership to venture capitalists. So not only does crowdfunding allow you to maintain ownership of your business without taking on new debt, but it also provides young companies with advertising and the chance to build up a large and enthusiastic customer base. Of course crowdfunding isn’t free, you will have to pay a commission on any funding you receive in addition to payment processing fees, but then again venture capital isn’t free either. The other big difference between crowdfunding and venture capital is the scale. Typically crowdfunding works on a much smaller scale, giving new start-ups the ability to raise thousands, tens of thousands, and occasionally hundreds of thousands dollars. Venture capital on the other hand isn’t always all that interested in such small investments, but could be a good place to start if you are looking for a million dollar deal.

While crowdfunding is a great way of getting your product seen and sold directly to consumers, it does not typically help you with funding large orders from retailers. For this, an excellent alternative to venture capital is purchase order financing, which is a service provided by many traditional accounts receivable factoring companies. With purchase order financing you can obtain a short term loan based on a purchase order, and then you pay back that loan by ultimately selling the invoice associated with that order to your factoring company.

Fintech Factoring vs Traditional Accounts Receivable Factoring

Factoring has always been an excellent alternative to getting a bank loan. However, fintech factoring companies haven’t really innovated the factoring industry, but rather offer short-term, high-interest small business loans that improve your cash flow, but don’t provide the other services that traditional factoring companies provide you with. Like traditional factoring, the fintech factoring companies are not too concerned with your business’s or your personal credit, meaning that companies that do not qualify for a traditional bank loan will qualify for a loan with them. However, coming from their IT backgrounds, the principals of these firms don’t have any real experience in the factoring industry, nor do they understand all of the benefits that traditional factoring offers small businesses.

In an interview with ABF Journal, George Bessenyei, director of 48 Factoring, stated “we are not coming from the financial space, we are coming from a technology space. I see us as a technology company that provides finance.” In another interview with ABF Journal, Eyal Lifshitz, CEO of BlueVine said “I was looking for a way to disrupt the lending industry. I started learning about factoring. I wanted to modernize it and make it a streamlined process where the borrowers can click a button and get money.” While it is true that these new fintech companies have streamlined the process of getting funded so it can be done entirely online, they also stripped-down factoring to its bare bones. Key aspects of factoring such as not taking on any new debt, outsourcing your credit checking and collections, insuring your receivables, and an unlimited potential for funding have been eliminated by the fintech factoring companies.

While fintech factoring may offer a faster, more streamlined approach to getting funded, and its rates mirror traditional accounts receivable factoring rates, they actually will cost you quite a bit more both timewise and financially than traditional factoring. Because fintech companies don’t handle your credit checking, you are still responsible for assessing the credit worthiness of your customers and will need to subscribe to expensive credit agencies in order to do so. You are also responsible for handling all the collection work, which as your company grows could eat up much of your time or require you to hire additional employees. Finally, without credit insurance, when a customer is unable to pay an invoice, you are out the money. While you could be very conservative in who you offer payment terms to, doing so will mean that you will be turning down a lot of business that a traditional factoring would most likely be willing to improve. Alternatively, for large orders, you can purchase credit insurance for an additional charge from insurance companies.

Technological Innovations Offered by Accounts Receivable Factoring Companies

It is true that accounts receivable factoring may be old, but that doesn’t mean that traditional factoring companies don’t innovate. The fact is, traditional factoring companies have been using innovative software and providing online tools to their clients for many years now. Nearly every traditional accounts receivable factoring company allows their customers to submit accounts for credit approval online, and oftentimes can provide their clients with instant approvals directly on the web page. Invoices can also be sent via e-mail to ensure speedy processing. Plus, your factoring company has the ability to pay you via ACH or wire so that funds are electronically deposited into your bank account as opposed to having to wait for a check to arrive in the mail and then take it to a bank. While the process might not be as streamlined as fintech factoring, accounts receivable factoring companies always pride themselves on speedy turnaround and funding you within 24 hours, if not the very same day that you submit your invoices to them.

Another common misconception that fintech factoring companies have about traditional factoring is that accounts receivable factoring companies are all owned by banks and only care about large accounts doing millions a year in sales. While it is true that many factoring companies are owned by banks and prefer not to deal with smaller businesses, this is not true of all factoring companies.

DSA Factors has always been family owned and operated, and we provide factoring to all businesses regardless of how much volume they do. At DSA Factors we have always been innovating ever since we started factoring in 1986 and programmed our very own factoring software using Basic on DOS 3.3 computers. While we have long ago moved on from our original software, we still continue to develop all of our own software and are continuously improving it in order to give our clients more options in how we finance their businesses. Today we offer online instant approvals to our clients along with a number of online reports including real-time aging statements as well as give them the ability to view previously paid transmittal sheets for as long as they have been factoring with us.  Additionally we provide your customers with a login where they can view an account statement and make payments online. We even welcome ideas from our clients on how to improve our online portal so that they can get the most out of our factoring services. So if you are looking for financing and want a factoring company that combines technology with knowledge, experience, and service, look no further than DSA Factors.  Give us a call today at 773-248-9000 and one of our principals will be more than happy to speak with you.

Fixed Rate vs Adjustable Rate Accounts Receivable Factoring

fixed rate vs adjustable rate accounts receivable factoringThere are two different types of rates that most factoring companies quote potential clients these days, fixed rate (or flat rate) and adjustable rate. These terms should sound familiar to anyone with a mortgage, and surprisingly they aren’t all that different in the world of factoring. In the world of mortgages, a fixed rate remains the same for the entire 30 year life of the mortgage, while with adjustable rate mortgages you get a teaser rate for the first 3, 5, or 7 years and then the rate goes up on you. In the factoring world, a fixed rate means that the rate you are quoted is the rate you pay for the life of the invoice, you don’t pay any interest, even if your customers pay their invoices late. With adjustable rate factoring, you are offered a low teaser rate, but you wind up paying interest for as long as it takes your customers to pay back your factoring company. Just like with mortgages, getting a fixed rate costs more than an adjustable rate, but in the long run it will save you money. At DSA Factors we have had a number of companies ask us about adjustable rate factoring over the last few years, but upon doing the math, all of them have chosen to go with fixed rate factoring, which we have been offering to our clients for over 30 years.

How does adjustable rate factoring work?

Adjustable rate factoring offers you a very low base fee for factoring invoices, often times it can be less than even 1%, but like most things in life, if it’s too good to be true it probably is. Once your factoring company funds you for the invoice the clock starts ticking and you start getting charged interest from that time until payment is received for the invoice by your factoring company. They will also add another 5-10 days worth of interest as they wait for the check to clear the bank.

What are the advantages to adjustable rate factoring?

Adjustable rate factoring can be beneficial if your customers pay like clock work and pay early. It also can be beneficial if you don’t need immediate cash flow. If you can hold onto your invoices for a few weeks before submitting them to your factoring company to get paid, you can potentially save quite a bit of money as your factoring company won’t have the invoices for very long before they get paid. Of course in both these situations you are missing out on one of the primary benefits of factoring, improved cash flow.

What are the disadvantages to adjustable rate factoring?

Besides the fact that you can face some pretty steep interest charges on your slow paying customers. Your factoring company has little motivation to collect payments for invoices in a timely fashion. If a good customer misses an invoice, which we all know happens from time to time, your factoring company may not bother to notify them until the invoice becomes 30 or even 60 days past due since they can charge you more interest during this time.

How does fixed rate factoring work?

Fixed rate factoring is very simple, you are given a rate based on the payment terms of the invoice, and that is the fee you pay regardless of how long it takes your customers to pay for your invoice. While it is true that it will cost more to factor a net 60 day invoice than a net 30 day invoice, you will not be charged any additional fees if it takes a customer 60 days to pay a net 30 day invoice. At DSA Factors we have always offered fixed rate factoring, and while it may be harder to sell the higher rate to prospective clients, we find that it is a much more honest and cheaper option. As a result we have clients who have been factoring with us for over 20 years.

What are the advantages to fixed rate factoring?

Besides the fact that you aren’t being charged interest for slow paying customers, with fixed rate factoring it makes your accounting much simpler as you always know what factoring will cost you and you can easily build the cost into your prices. Plus, since your factoring company does not benefit from late payments, they have more reason to collect in a timely fashion. As a result, they are less likely to turn down reorders due to an account being past due.

What are the disadvantages to fixed rate factoring?

If your customers pay early you still pay the same factoring fee. However, if you have customers who consistently pay early, DSA Factors would be willing to work with you to put together an early pay discount program for these customers.

How do I choose which factoring rate is right for me?

A good way of thinking about adjustable rate factoring is that it is a lot like taking a cab, you have a small flag fall but the meter keeps running until your factoring company gets paid. With fixed rate factoring, it is a lot like taking a limo, you know the price going in, and the service is usually better as well. But don’t worry, whichever route you choose, you don’t need to give your factoring company a tip!

At DSA Factors we have run reports for our clients showing them what their fee would be with adjustable rate factoring, and while it typically is very similar, flat rate factoring has always proven to be the cheaper option. If you would like to learn more about adjustable vs flat rate factoring please give DSA Factors a call at 773-248-9000 and we would be happy to talk to you about it. We would even be happy to run an analysis on your payment data to see which option would work best for you.

The Quickest Way to Improve Your Cash Flow

Improve your cash flow with accounts receivable factoringStarting a new business or growing your existing business can be a daunting task, especially if you don’t have the cash flow necessary to pay your suppliers, meet payroll, make rent, or take on large orders. While many business owners are familiar with SBA loans, the application process is lengthy and many businesses who apply don’t qualify for a loan. Oftentimes you may miss out on a large opportunity while waiting for a bank to make a decision. However, with accounts receivable factoring, not only can you start getting funded within 24 hours, you will qualify for factoring even if you have less than stellar credit.

Factoring is one of the quickest and easiest ways to get instant cash flow so that you can start growing your business. In addition, factoring is not a loan, when you factor your invoices you are taking on no new debt, instead you are simply selling your receivables and getting funded immediately while still being able to offer credit terms to your customers.

The way factoring works is quite simple. When you sell your product to another business that is requesting payment terms, you invoice them and then need to wait 30 days or longer to get paid for the merchandise or service you provided. However, with factoring you will get paid the same day you invoice your customer. Your customers still receives the payment terms that they need, but when the invoice is due they pay your factoring company. As a result, you no longer have all of your money tied up in receivables, instead you have working capital that you can use for whatever you need it for.

In addition to improving your cash flow, factoring also allows you to reduce your expenses and cut losses. Your factoring company will provide all of the credit checking on your customers for you, eliminating the need for you to subscribe to expensive credit agencies. Your factoring company also handles all of your collections for you so you no longer need a dedicated employee handling your receivables. Finally, with non-recourse factoring, your factoring company insures your receivables, so you no longer need to worry about customers who are unable to pay for the merchandise you sold them.

If your business can benefit from improved cash flow, accounts receivable factoring might be just the tool you are looking for. At DSA Factors we have been providing accounts receivable factoring for over 30 years. We work with a wide range of industries including, furniture, bedding, giftware, housewares, textiles, apparel, food, trucking, marketing, staffing, and many more. Whatever your industry, if you have receivables, DSA Factors has the money you need to grow your company. Call us today at 773-248-9000 and we can be funding you in as little as 24 hours.

Traditional Factoring vs Fintech

Accounts Receivable Factoring vs FintechThere has been a lot of talk in the news about fintech (financial technology) lately.  Certainly there is a lot to be said about alternative approaches to financing over more traditional methods offered by the banks. However, accounts receivable factoring has always been an alternative financing method over what the banks offer, and has a long track record of success. In fact, many of the fintech companies even offer factoring programs, but they tend to be bare bones versions of factoring that only offer some of the benefits gained by factoring, and oftentimes even charge higher rates than traditional factoring companies.

The factoring industry has been around for a long time. It was well established in Europe when the original colonists brought it over to America. In fact, the king and queen of Spain offered a form of factoring to Christopher Columbus when he wanted to set sail for the “New World”. While this may seem antiquated in our modern technology driven world, the fact is that most factoring companies do take advantage of modern technologies, offering most of the benefits of fintech, but with much more experience, a proven track record of helping to grow small to medium sized businesses, and much lower rates.

To see the difference, the chart below compares traditional factoring with DSA Factors to similar programs with PayPal Working Capital, Bluevine, and Fundbox, three of the more popular fintech companies offering similar programs to invoice factoring.

 DSA FactorsPayPal Working CapitalBlueVineFundbox
DSA FactorsPayPal Working CapitalBlueVineFundbox
Take on New DebtNo, the funds DSA provides you with are yours to keep.Yes, PayPal is offering you a loan, so you are taking on new debt.Maybe, if your customers don't pay BlueVine, they will require you to pay them back after 90 days.Yes, Fundbox is offering you a loan, so you are taking on new debt.
Credit LimitNo, with DSA Factors we will fund you for all of your receivables.Yes, the lesser of 18% of your annual sales on PayPal or $97,000.Yes, $20,000 to $500,000 based on your company's credit.Yes, $25,000.
Based on Your CreditNo, since DSA is giving your customers a line of credit, credit decisions are made based on your customer's good credit.No, the loan amount is based on your annual sales volume with PayPal.Yes, BlueVine will assign you a credit limit based on your credit worthiness.Yes, Fundbox determines your credit limit based on your credit worthiness.
Charges You InterestNo, DSA offers a flat rate factoring fee.Yes, the interest is charged to you up front when you get a loan, regardless of how long it takes to pay the loan off.No, BlueVine also offers a flat rate program, but at 10-15% their rates are at least triple or quadruple the rate that DSA offers.Yes, based on the size of the loan, Fundbox may charge you anywhere from 5-12% over the course of a 84 day loan.
Term LimitNo, DSA Factors has no problem working with extended terms.Yes, PayPal requires you to pay back 10% of the loan every 90 days, with the full amount due in 540 days.Yes, if payment has not been received after 90 days, you are required to pay back BlueVine.Yes, you must pay off the loan in 12 weekly installments.
Collections OutsourcingYes, DSA Factors handles all of your collection work.No, your customers must make payments through PayPal, but PayPal does not help with collections.No, your customers are required to make payments to a BlueVine drop box or bank account, however BlueVine does not help you collect.No, Fundbox does not handle collections for you, it is strictly a loan that you need to pay back.
Insure Your ReceivablesYes, with DSA's non-recourse factoring your invoices are insured against non-payment.No, PayPal only does payment processing for you.No, if an invoice has not been paid after 90 days of being funded for it, you are required to pay back BlueVine.No, Fundbox is strictly a loan that must be paid back in 12 weekly installments.
Choose Which Invoices You FactorYes, DSA Factors does not require you to factor all of your receivables.No, a percentage of all payments made through PayPal will be applied towards your loan.Yes, you can choose which invoices you want to get funded on.Yes, however there is a $100 minimum in order to get funded for an invoice.
Minimum Volume RequirementNo, at DSA Factors you are not required to factor a certain amount, and there are no annual fees.Yes, PayPal requires you to pay back 10% of the loan every 90 days if you aren't doing enough volume.No, BlueVine does not require you to fund a minimum amount each year.No, Fundbox does not require you to draw a minimum amount each year, however, they will not fund you if an invoice is worth less than $100.
Long Term CommitmentNo, with DSA Factors you can stop factoring at any time, but since many of our clients have been with us for over 20 years, we don't think that you will want to stop.No, once your loan with PayPal is paid off you can start looking for alternative sources of financing.No, BlueVine allows you to stop drawing on your line of credit at any time, but you will need to pay them back for any invoices that they have not received payment on.No, once you have paid off your loan with Fundbox, you are free to pursue other financing options.
Charge Payment Processing FeesNo, DSA will never charge you for processing a payment.Yes, you are required to accept payments through PayPal and pay their payment processing fees.No, although BlueVine will funnel all payments into their account without your customers knowing that BlueVine is receiving the payment.N/A, Fundbox does not process payments.
Available TechnologyDSA offers its clients an online portal where they can get automatic approvals, view agers, remittance reports, and other reports in real time. Your customers may also go online to make payments.With PayPal you get a loan online and customers make payments online.BlueVine requires the use of Quickbooks or similar software to get funded.Fundbox requires the use of Quickbooks or similar software to get funded.
Good Old Fashioned ServiceAs a family owned and operated business, you can call DSA at any time and speak with a principal who can come up with creative solutions to help grow your business.PayPal doesn't even list a phone number on their web site.BlueVine may have a phone number, but it is doubtful that you will be able to speak to anyone who can actually help you.Fundbox may have a phone number, but it is doubtful that you will be able to speak to anyone who can actually help you.

As you can see, traditional accounts receivable factoring with DSA Factors offers all of the benefits that the fintech companies offer, along with many more.  You still get an online portal where you can efficiently do business and your customers can make online payments, but you also can pick up a phone and speak with one of our principals at any time.  As a result, we can come up with creative solutions for your business that might not fit into a fintech company’s software, such as purchase order financing.  So if you are looking for ways to finance your business, go with a time-tested method that works, accounts receivable factoring.  Give DSA Factors a call today at 773-248-9000 and we can be funding you in as little as 24 hours.

What are the Benefits of Accounts Receivable Factoring

Benefits of Accounts Receivable FactoringMany companies out there aren’t familiar with all of the benefits that accounts receivable factoring has to offer. While cash flow might be the main reason why companies use accounts receivable factoring, it is not the only one. Companies that don’t use accounts receivable factoring often times are missing out on the bigger picture, and as a result, may not be able to grow their business as quickly as they would like or as quickly as competitors who do factor their invoices. Below are some of the benefits of accounts receivable factoring.

Improved Cash Flow

The main reason why companies choose to factor their accounts receivable is for the improved cash flow that factoring offers.  Rather than wait around 30 days or more to get paid for merchandise you have shipped or a service you have performed, with factoring you can get paid the same day that you invoice your customers.  This improved cash flow can help you to make payroll, pay off your suppliers, or cover any other expenses you have in growing your business.

Larger Orders, Larger Accounts

While it is true, many customers are happy to give you a credit card when they place an order, when you offer your customers payment terms they are more likely to place larger orders with you. The reason for this is quite simple, cash flow is very important to them. Your customers are just like you, they’ve got payroll expenses, rent, and utility bills, plus they need to pay their vendors. Even if sales are slow, they still need to meet payroll, pay rent, and pay the utility bills, if they don’t they will face some pretty serious consequences. If their vendors require them to pay with a credit card, then they also need to pay that credit card bill on time and in full every month or they can be facing late fees and high interest rates. As a result a company that is giving you a credit card is going to be conservative with how much they are ordering, if they can’t sell it all between the time the order is placed and the time the credit card statement is due they will have some pretty serious problems. However, if you offer them payment terms they know that if they pay a few days late that there won’t be any consequences. As a result they will be more willing to place larger orders knowing that if it takes them a week or two extra to pay the bill that they won’t be facing any interest charges or late fees.

Then there are the big box stores and online retailers. If you want to sell Walmart, Costco, Amazon, or any of the other big boys, there is no way that they will give you a credit card, in fact they may even request longer terms such as net 60 or net 90. If you want to get these large accounts it is absolutely crucial that you offer terms.

Eliminate Bad Debt

With non-recourse factoring you no longer have to worry about bad debt because your factoring company insures your receivables. If one of your customers is unable to pay for the merchandise you shipped them due to financial hardship, including bankruptcy or out of business, your factoring company assumes full responsibility for the bad debt and you still get to keep the money that they gave you for the invoices. And unlike insurance companies who will only insure receivables for large corporations with great financial strength, such as Walmart, factoring companies are willing to take a lot more risk and will not just insure sure bets, but will also insure mom and pop stores, online retailers, and a variety of other businesses. So by factoring your receivables you not only improve your cash flow, but you also get insurance on the accounts that you need insurance on

Outsourcing your Accounts Receivable

With factoring you are also outsourcing your accounts receivable department which has several benefits. For one, you won’t need to have any staff dedicated to accounts receivable, which can lower payroll or allow you to refocus their efforts on another aspect of running your business. You also won’t need to subscribe to expensive credit agencies in order to stay on top of which customers are credit worthy, instead your factoring company will do this for you.

Your factoring company will also handle all of your collection work for you. Furthermore, your factoring company also has more leverage in collecting on seriously delinquent accounts than you would. Since your factoring company has a large number of clients, it is possible that they may have five, ten, or even more clients who sell also sell to your customer. If your customer doesn’t pay you then you will stop shipping them, however, they will still be receiving merchandise from other vendors who they pay in a more timely fashion. If your customer doesn’t pay your factoring company, then they will be cut off from a large number of their vendors.

No New Debt

When you factor your accounts receivable you aren’t assuming any new debt.  Factoring is not a loan, the money you receive from your factoring company is in exchange for your invoices. Basically all you are doing is selling your invoices to your factoring company, and therefore the funds they provide you with are yours to keep. As a result you can spend these funds in any way you choose, these is no need to justify where the money is being spent like you would with a loan from a bank, the money is yours to spend however you wish.

Purchase Order Financing

While purchase order financing is not the same as accounts receivable factoring, it is a service that some factoring companies offer to their clients. Unlike accounts receivable factoring, purchase order financing is a loan. The loan is based on a purchase order that you have, and the funds you receive are to be used to fulfill that purchase order. Once fulfilled and the merchandise is shipped to your customer, you would factor the invoice and your factoring company will apply a portion of the invoice toward the loan they gave you and give you an advance based on the remainder.

How do I Start Factoring?

Factoring is quick and easy. Unlike securing a loan from a bank, factoring companies are able to make decisions in minutes rather than months. At DSA Factors we offer a simple flat rate fee factoring program and can be funding you in as little as 24 hours. We are a family owned and operated business that has been providing accounts receivable factoring for over 30 years. Call today at 773-248-9000 and find out just how easy factoring can be.

How to Make Money with Accounts Receivable Factoring

Feed your piggy bank!It may seem counter intuitive that a service that costs you money will actually make you more money, but it is true. As the old saying goes “it takes money to make money”, and this is true when it comes to accounts receivable factoring as well. There are actually a handful of ways that factoring can help your bottom line, and some may not be so obvious.

Comparing Factoring Rates

The first thing you need to look at is the cost of factoring.  If you currently take credit cards for payment, factoring fees are very similar to the fees that the credit card companies charge you, and possibly even less than Discover and AmEx.  As a result, you will already have the factoring fee built into your pricing.  However, it is important to make sure that your factoring company is charging you a flat rate fee, otherwise if your customers pay late you may wind up paying two or three times a credit card fee in interest.  DSA Factors offers low flat rate fees, so you know exactly how much it will cost to factor an invoice.

Factoring Leads to Larger Orders

Often times your customers may have the same cash flow crunch that you have.  They may not be able to pay for an order until the merchandise in the store sells.  That is why it is important for them to be given 30 days to pay for the merchandise that they buy.  However, while the credit card companies allow you to pay each month, if you don’t pay the credit card bill by the due date on come the late fees and interest charges.  So when a customer pays by credit card, they need to be absolutely sure that they will have the money to pay for it when that bill arrives in the mail.  As a result, they may be hesitant to place a large order out of fear they won’t be able to pay for it on time.  When you offer terms to your customers, this isn’t an issue.  It is generally accepted that if you pay for an invoice with terms a little bit late, you won’t be hit with late fees or interest charges.  As a result you can sell more merchandise to your existing customers, as well as pick up major retailers, such as Walmart, TJX, Costco, or Amazon, who will only buy merchandise on terms.

Benefit from Increased Cash Flow

If you currently offer terms to your customers and aren’t factoring your invoices, you can also benefit from the increased cash flow factoring will provide you with.  You can use that improved cash flow to pay your suppliers faster, which in return will allow you to increase the volume of business that you do.  After all, if you can get a container onto a ship thirty days earlier, you will be able to fulfill more orders faster, which will also lead to quicker reorders.

Outsource your accounts receivable

Furthermore, you can save money is on salary.  By outsourcing your A/R department to a factoring company.  You don’t need to have employees making collection calls and sending out account statements, your factoring company will handle this for you.  As a result, your employees can focus on things like making sales, marketing, or product development which will translate directly into higher sales volume.

Credit Checking and Insurance

Finally, you will save money on the cost of doing business.  Since your factoring company will do all of the credit checking for you, you no longer need to subscribe to expensive credit agencies.  If your factoring company offers non-recourse factoring, as DSA Factors does, then you will also eliminate bad debt as your factoring company assumes responsibility for customers who do not pay their bills.

Grow Your Business with Accounts Receivable Factoring

As you can see, accounts receivable factoring can be a great way for your business to increase its revenues while eliminating expenses.  If your business can benefit from increased cash flow, then factoring may be the best way to make money and grow your business.

Designing Outdoor Spaces

Outdoor SpaceIn a recent survey conducted by Houzz in was found that 80% of homeowners hired professional help to renovate their house last year, with 60% of homeowners making upgrades to outdoor spaces.  The most common upgrade was to patios, decks, and terraces.  With over half of all outdoor spaces being designed for year-round use, it should come as no surprise that the most active regions for improvements to outdoor spaces were in the South and West.

Designers try to create outdoor spaces that will allow you to do everything that you normally do indoors, effectively expanding your home to the outdoor space.  The majority of designers will even try to match the styles and colors you have inside your house to what they are designing for the outside.  They primarily focus on three activities when designing an outdoor space, entertaining, relaxing, and cooking.  For an outdoor space, designers on average spent $6500 on outdoor furniture this year, a 37% increase from last year when they spent only $4750.  They also spent an average of $1500 on grills, up 25% from last year.  But the biggest change is in outdoor accessories such as rugs and wall decor, designers spent $2000 on average for these items, an 82% increase from 2014’s average of $1100.  Perhaps the main reason for this tremendous increase in spending on accessories comes from the desire to make outdoor spaces feel more like indoor spaces.

The only items that designers are spending less on this year is outdoor lighting, which at $2000 on average is down 11% from last year.  This is a bit surprising since the most common technology designers incorporate into outdoor spaces is LED lighting.  But as improvements are being made in this new technology, prices for LED lighting have been dropping.

Designers are also focusing less on more traditional uses for outdoor spaces.  Only 57% of designers include plans for gardening in their designs.  45% will include plans for playing with children.  While only 43% will include plans for sunbathing and swimming.  This further emphasizes the idea that the space outside of your home is just an extension of the space inside your home, instead of being a completely separate space devoted to only outdoor activities.

Designers most typically source products for outdoor spaces at trade shows and design centers, but many of them also go to casual furniture stores or look online.  If you are a supplier of casual furniture or accessories it would be a good idea to make sure that you product can be found in these places.  If you need help with cash flow so you can attend the markets, or need to start offering net 30 day terms on your invoices, give DSA Factors a call at 773-248-9000.  We have been factoring for the furniture and accessories industry since 1987 and are very familiar with the seasonal nature of the casual furniture industry.  Also, look out for us as we will be visiting the Casual Market Chicago from September 16-19.

Learn Just How Easy Factoring Your Receivables With Accounts Receivable Financing Can Be!

Factoring your receivables has many benefits:

With DSA Factors you can start factoring your receivables today.  Why wait months for a bank to turn down your loan request, DSA Factors will get you money that you need today.  Our process is easy and we have no long term contracts and no minimum volumes.  We have been factoring commercial accounts since 1986 and our large database of retailers throughout the US and Canada allows us to approve most of your accounts instantly.  Give us a call today at 773-248-9000 and learn how we can help your company grow.

Where do you buy your bedding?

Mattress SalesThere are a large variety of types of stores selling furniture these days, but when it comes to bedding, how old you are probably determines where you shop.  A recent study in Furniture Today revealed which generations purchase bedding at different types of stores.  Overall, Millennials and Generation X each have a 35% share of the market, while Baby Boomers have a 26% share, and Seniors a 4% share.

Bedding specialty stores get a large variety of customers, but they also tend to have the highest prices with the price of their average queen set costing $699.  As a result Generation X makes up their largest share of customers at 37%, followed by Baby Boomers at 34%, Millennials at 23%, and Seniors at 6%.
Traditional furniture stores also seem to receive a fairly evenly distributed clientele.  While not as expensive as bedding specialists, their prices are still up there with the average queen set costing $599.  Millennials make up their largest share at 36%, followed by Baby Boomers at 33%, Generation X at 30%, and Seniors at 1%.
Beyond these two types of stores, things get a little more lopsided.  There are the manufacturer branded furniture stores whose average queen set costs $599, department stores where the average queen set costs $499, warehouse membership clubs have the average queen set at $479, online retailers where the average queen set is $325, discount department stores where the average queen set is $275, and finally lifestyle furniture stores where the average queen set will only set you back $155.
It should come as no surprise that Millennials prefer to shop at the cheaper places.  They hold a 58% share of sales at lifestyle furniture stores such as IKEA, a 43% share at discount department stores such as Walmart, and a 59% share at online retailers such as Amazon.  But what may surprise you is that they also hold a 53% share at the pricier manufacturer branded furniture stores such as Ashley Home Stores.
Generation X prefers to shop at department stores such as Macy’s where they hold a 55% share of the business.  They also hold a 43% share at warehouse membership clubs such as Costco, a 40% share at discount department stores, and a 31% share at manufacturer branded furniture stores.
Baby Boomers do most of their shopping at the bedding specialty store and traditional furniture stores.  Warehouse membership clubs are next, but only 21% of their business comes from Baby Boomers.
For Seniors who only hold a 4% share of the overall market, they take a large 14% share of business at warehouse membership clubs.  They also hold a 7% share of the business at department stores.
If you are targeting your mattresses towards a certain demographic, make sure you are selling to the stores they shop at.  If you need help selling to those stores, give DSA Factors a call today at 773-248-9000 and with our accounts receivable factoring you can get paid today for your net 30 day invoices.

Bigger is Better – Top Furniture Retailers Seeing Higher Sales

Higher SalesAccording to a recent report in Furniture Today, the top 10 furniture retailers saw an 11% increase in sales in 2014 over 2013, while the top 100 retailers experienced sales increases of 8.3%.  This is the fifth straight year that the top 100 have experienced sales growth.  Overall furniture sales have grown from $50.5 billion in 2013 to $52.8 billion in 2014, a 4.5% increase overall.  This means that the top 100’s gains has come mostly at the expense of smaller furniture retailers.

It isn’t just sales that are growing, but also locations as well.  The top 100 retailers opened a combined 711 stores in 2014, a 7.4% increase in the number of locations, with the top 10 leading way with a 22% increase in new stores.  2013 saw only 321 new stores open for the top 100.  While many of these are actual new stores, many of them also came thru acquisitions.  Mattress Firm alone added over a hundred new stores thanks to acquiring two other chains that were in last years top 100 list.
The top 100 retailers were able to account for 79% of all sales for US furniture stores.  They accounted for 37% of overall furniture sales nationwide.  This takes into consideration not just furniture stores, but any other stores, whether brick and mortar or online, or catalogs that sell furniture such appliance stores, department stores, rental stores, warehouse clubs, and many more.
Leading the way in the top 100 were the specialty stores.  There are 27 specialty stores in the top 100, and they combined for net sales increases of 10.4%, while conventional furniture stores saw net sales increases of 6.5%.  Even more amazing is that these 27 stores accounted for 45% of sales for the top 100.  It was the 10 bedding specialists in the top 100 that were able to account for most of these gains.  Bedding specialists saw a net sales increase of 15.6% while they added 555 new stores, an increase of 14.2%.
The top 10 stores are as follows:
  1. Ashley Furniture HomeStore
  2. IKEA
  3. Williams-Sonoma
  4. Rooms To Go
  5. Mattress Firm
  6. RH
  7. Berkshire Hathaway [furniture division]
  8. Pier 1 Imports
  9. Raymour & Flanigan
  10. Sleep Number
With the big names taking a higher share of sales volume away from the smaller stores, it is more important than ever that you are able to get your products into their stores in order to grow your business.  To get into these stores you need to be able to give them terms on large orders.  Let DSA Factors factor your receivables and improve your cash flow so your business can grow.  With our help you no longer need to worry about cash flow or credit, and can instead focus on sales.  Give us a call today at 773-248-9000.
This data is based on furniture, bedding, and accessories sales.