Factoring is the Answer to Improve Your Cash Flow!

There’s something very important to understand when you are in business.  It is wonderful to grow your business with increased sales, but the most important thing is to get paid on your invoices! No matter how much you sell, if you don’t collect the money, you will not be able to survive.

Business owner are so involved in selling products and services that they forget to take the time to manage their cash flow and get paid for those sales.  You also need to have a plan on what it takes to collect your money. The simplest and most efficient method in improving your cash flow and handling collections is to factor your accounts receivable.
Factoring your receivables allows you to sell your receivables and get cash now instead of waiting 30 or 60 days.  Of course there’s a fee for using a factoring service, but you will be able to offset that fee by potential savings you can incur when negotiating discounts from your suppliers.  If you have the cash available, you may be able to attain a discount for paying your vendors quickly.  Your net cost of factoring can be reduced to nothing.
Regardless, a  huge benefit to using a factoring company, especially DSA Factors, is that you do not have to subscribe to expensive credit rating bureaus to check out the credit worthiness of your current and potential customers.  Another benefit is that you don’t have to call your customers for payments.  You can concentrate on calling on the customers to increase your sales, and the factoring company can do all the dirty work in collecting payments for past invoices.  If the customer goes bad, and doesn’t pay,  the factoring company normally holds that responsibility.  So besides getting the up front cash flow you need, you will also be able to have assurance that you won’t get stuck with unpaid invoices.
Remember, your cash flow is not the same as your profits. You can have a profitable business, but a negative cash flow due to retaining accounts receivable. Factoring can give you the positive cash flow you need to make your business even more profitable.
Call Howard at DSA Factors at 773-248-9000 if you would like to learn more about how factoring can help your company.  Or you can shoot an email to howard@dsafactors.com

DSA Factors is Ready to Help a Rebounding American Furniture Industry

According to the Boston Consulting Group (BCG) recent report titled “Made in America, Again: Why Manufacturing Will Return to the U.S.”, we can expect to start seeing furniture manufacturing returning to the United States.  In fact BCG believes that furniture is just one of seven “tipping-point” industries that will start moving manufacturing jobs from China back to the US.  The list of industries includes the automotive, electrical equipment and appliances, furniture, plastics and rubber, machinery, fabricated metal products, and the computer and electronics industries.  These industries account for approximately $2 trillion in sales annually and account for 70% of all Chinese imports.  Additionally this can lead to the creation of 2 to 3 million jobs in the United States.

According to BCG, Chinese wages have been rising at 15-20% per year, while the Yuan RMB has been appreciating against the US Dollar.  The once enormous labor gap cost will shrink to less than 40% by 2015.  As a result the industries mentioned above which have a relatively low labor cost, compared to high costs of shipping, materials, security, delivery responsiveness, and quality control, will begin to move manufacturing of products back to the US for sales throughout the Americas and Europe.  The Chinese will not be closing their factories as they will still have a competitive advantage in Asian markets, but their competitive advantage will disappear in North America and most likely in Europe as well.

BCG does mention that Mexico will still have a much lower labor cost than either China or the US, and some manufacturing jobs will almost certainly go to Mexico.  However the vast majority of manufacturing should be coming back to the US due to our larger skilled workforce and for logistical and security reasons in these tipping-point industries.  The clothing and textile industries, however, most likely won’t be returning due to their high percentage of labor costs which will allow the Chinese to keep their competitive advantage.

These changes are already becoming apparent.  From 2001 to 2004 Chinese imports grew by about 20% per year.  However, there have been dramatic decreases in recent years with imports flattening out and even declining in 2009, not just for Chinese imports but for imports from all low-cost nations.

At DSA Factors we are proud to support the American manufacturing industry and are ready to help out anyone, big or small, who is bringing manufacturing back to the US.  We are located in Chicago and have been serving the furniture, bedding, giftware, housewares, trucking, staffing, and many other industries since 1986.  We have helped many companies to grow over the years and will work with you to grow your business.

Using Factoring to Survive the Cash Flow Crunch

Companies facing a cash flow squeeze have the option of selling their invoices or accounts receivable to factoring companies as a quick and reliable way of receiving the funds necessary to run their business.  The way a factor works is they check the credit-worthiness of your customers and assuming they have good credit will purchase your accounts receivable for that customer at a small discount.  As a result you will receive immediate cash instead of waiting for 30 or 60 days to collect.

At DSA Factors we can offer to pay you up to 96% for your invoices, and you can receive that money the very same day with a wire transfer or the next day via an ACH.

Many businesses use factors when they are first starting out because they may not have established a long enough credit history to get a loan from a bank, while a factoring company is more concerned with the credit-worthiness of their customers.  However many older, well established companies also use factoring because of the many advantages it offers.  Not only is it much easier to work with a factoring company than get a loan from a bank, but the factoring company also provides valuable services such as doing all of your collections and even insuring your receivables.  Additionally a factoring company is more willing to work with you than a bank as their success is directly tied to your own success.  At DSA Factors you will always be able to talk with one of our principals as well as be able to access a variety of information about your accounts 24/7 from our online tools.

Factoring can work for pretty much any industry, and some industries are almost entirely reliant on factors to meet their cash flow needs.  At DSA Factors we specialize in factoring for the furniture, trucking, and staffing industries.  However we have a wide range of clients that sell everything from office supplies to clothing as well, and we are able to work with any industry to meet their financing needs.  We can also work with any size account, whether you are selling tens of thousands of dollars worth of merchandise to a Target or Sam’s Club, or just a few hundred dollars worth to mom and pop stores.

Why choose Accounts Receivable Financing (Factoring) over a bank loan?

Accounts receivable financing, or factoring, is an excellent alternative to traditional bank loans and is becoming a more and more popular way of raising funding to help your business grow.  Factoring is something that can be used by pretty much any industry, from manufacturing to trucking to staffing and many more.

Factoring is a fast and simple way of raising money without having to go through any hassles.  When you apply for a bank loan it is a long drawn out process that requires many forms, personal guarantees, lien assets, and they will ask you what you plan to do with the money from the loan.  Then, should the bank decide to give you a loan, they also give you an inflexible payment schedule as well as a potentially high interest rate.

However, with factoring invoices, you submit your credit-worthy invoices and can receive immediate payment for them the very same day you submitted them.  Furthermore this money is yours and does not need to be paid back so long as there are no problems with the merchandise or service provided.  You can spend the money any way you want, whether its for payroll, raw materials, paying off creditors, advertising, expanding your business, or anything else.  You also don’t need to put up any collateral, you are selling your invoices to the factoring company so there is no need for a lien on any of your other assets.

But getting instant cash for your receivables doesn’t just improve your cash flow and provide you with needed money, it also eliminates the need for credit checks and collections.  Before you sell your product to a potential customer you submit it to the factoring company for approval.  It is the responsibility of the factoring company to run credit checks and make sure that the customer is credit worthy.  At DSA Factors we work our hardest to approve accounts submitted to us, while other factoring companies may look for reasons to turn down accounts, we look for reasons to approve them.

The factoring company will also do all the collection work for you as well.  When you factor your accounts receivables you are selling your invoices to the factoring company, it is now their responsibility to collect from the customers.  At DSA we know that your customers are very important to you so we make sure to always treat them with respect so that you can establish long and profitable relationships with all your customers.

Factoring your accounts receivable can be a very effective way of raising capital quickly and hassle free for both large and small companies.  If you have accounts receivable then factoring can work for you.  Feel free to call DSA Factors at 773-248-9000 or visit our web page at www.dsafactors.com.

How does factoring insure my receivables?

Factoring isn’t just a way of improving your cash flow and eliminating the need for collections, it also acts as a form of insurance for your receivables.  At DSA Factors we offer Non-Recourse factoring.  We offer immediate payment for your receivables and that money is yours.  That means that even if an account doesn’t pay, you still keep the money we gave you for your invoice so long as there are no merchandise disputes.

How do we do this?  Well its simple, before an order is placed you need to get an approval for the account.  This means that we check the accounts credit ratings and payment history to make sure that they are an honest company and pay their bills.  You will no longer need to look up credit ratings or even subscribe to credit agencies or check credit references before selling your products to someone.

DSA offers online automatic approvals to our clients, all you need to do is login to our web site and enter the account and order information.  Most accounts are automatically approved and you will receive an instant notification that the account has been approved.  With accounts that we can not automatically approve, we will review the accounts at our office and get an answer to you within 24 hours.  When we receive a request for credit we don’t look for reasons to turn down the account, but rather we look for reasons why we should approve the account.  So even if we can’t automatically approve an account, most likely we will be able to approve it still.

Unlike other factoring companies, when DSA extends a line of credit to one of your accounts, you don’t need to share that line of credit with other clients of ours which may sell to that account as well.  So you will not be turned down because we are already factoring invoices on that account with another client.  Each account gets a separate line of credit with each one of our clients.

Money To Make Your Company Grow

From time to time, both large and small businesses have a problem with cash flow.  This shortage in cash may be due to seasonal requirements, rapid expansion, product development, or any number of other circumstances.  The remedy most business owners and managers consider first is bank financing.  Many times, however, businesses are ineligible because they have used their entire line of credit, or they need to avoid long-term monthly payments.

DSA Factors offers a solution to this cash shortage through factoring. Factoring is the purchase of accounts receivable on a discount basis.  In effect, DSA Factors is a secondary financial market that helps businesses through the cash flow crunches that can occur when they have to wait for payment on their invoices.  Companies with creditworthy customers can factor their invoices and receive cash in as little as 24 hours, with no minimum or maximum contracts.  In fact, we currently have clients that factor invoices for less than $200 as well as clients that factor invoices for many thousands of dollars.

To see how your business can benefit from our professional services, contact Howard Tolsky at DSA Factors, 773-248-9000, today for additional information.  Or visit our web site at www.dsafactors.com.

What can factoring do for you?

If you try our factoring service, the benefits you will receive are as follows:
  • You will get INSTANT cash for your accounts receivable (24 hours MAX!)
  • You can offer your customers 30 or 60 or 90 day terms!
  • You will eliminate all work associated with collecting money from your customers.
  • You will spend more time doing what is “KEY” to your business, which is increasing your SALES!!
  • You will have the cash necessary to pay your bills more promptly like payroll, inventory, and office expenses.
  • You most certainly will expand your business by having the ability to handle larger orders.
Why use DSA instead of CIT or GE or any of the other factoring companies?
  • You will be able to talk to the principals at DSA any time you need to, in other words you will get real CUSTOMER SERVICE.
  • You will receive approvals for your orders normally within 1 hour!
  • You will receive a much higher APPROVAL rate on your requests (we look for reasons to APPROVE your accounts, not reasons to turn them down).
  • You will receive a very competitive factoring rate for your receivables.
  • You are not required to sign any LONG TERM or SHORT TERM contract.
  • You won’t pay any minimum monthly or annual factoring fees.
  • You don’t need a Philadelphia lawyer to comb through the typical 37 page factoring agreement. (Ours is a total of TWO pages).
In a nutshell, here are SEVEN benefits you will receive from us when you are factoring your receivables:
  1. You are paid on your receivables 96.1% up to 98.1% of their value.
  2. You don’t  make collection calls anymore. You will be assured that we, DSA will treat all of your customers with respect and care just as you would.
  3. You and DSA will work together with “as a team” in handling your customers. 
  4. You can eliminate quoting your customers terms of COD or PREPAY or CREDIT CARD.
  5. Your customers will place larger orders knowing that you will be giving them open credit terms.
  6. You will have access to our interactive website 24 hours a day where you can request approvals, check to see if your accounts have paid, look back at all  transactions between us, and lots more!
  7. You don’t stay up nights wondering when your customers will pay you!
If factoring sounds like something you can use visit our web page at www.dsafactors.com or call us at 773-248-9000.
P.S. You can just TRY our service on an invoice or 2 to see how it works. No long term obligations.
P.P.S. You will be able to pay all your bills timely and maybe even get discounts if  you prepay some of your bills. If that is the case, our service can be FREE to you.
P.P.P.S.  Our program is non-recourse, which means if we approve an account and they don’t pay because of their inability to pay (bankrupt, financial problems, etc.), you will not have to incur the loss.

NOW would be a great time for you to

What is Factoring?

Factoring your accounts receivables, or invoices, is an easy and effective way of improving your cash flow without taking on any new debt.  When you work with a factoring company, such as DSA, you are able to offer customers terms without having to wait to get paid.  Unlike getting a loan from a bank, factoring is not a loan but rather a sales transaction.  You sell the factoring company your receivables and receive instant cash for them; it is then the responsibility of the factoring company to collect the payments when they are due.  So the factoring company doesn’t just help increase your cash flow, but also takes care of collections, allowing you to focus on what you do best.  Your customers will always be treated with respect by the factoring company, as the factoring company’s success is entirely dependent on your success.  Factoring can be extremely beneficial to any business, from small start-ups to larger well established companies.

For more information on factoring, or to start factoring your accounts receivables please visit DSA Factors, email us at info@dsafactors.com, or give us a call at 773-248-9000.

Welcome to Factoring 101 presented by D.S.A. Factors

Welcome to Factoring 101, a blog intended to teach you everything you need to know about factoring your accounts receivable.  In this blog we will be discussing what factoring is, the benefits of factoring, and keeping you up to date on the latest news on factoring and related industries.

This blog is presented by D.S.A. Factors, factors to the furniture, trucking, staffing, and all other industries since 1987.