Financing a Startup Business with Accounts Receivable Factoring

Finance your startup business with accounts receivable factoringOften times for a new startup business, it can be difficult to obtain financing. SBA loans are usually out of the question as banks will want to see a track record and will require collateral that a startup business most likely wouldn’t have. Venture capital is an option, but is usually reserved for tech companies that have a huge potential for growth, plus often times it requires you to give up ownership of your business. However, accounts receivable factoring is a great way for a startup to finance their business without having to give up any ownership or taking on new debt.

What is Accounts Receivable Factoring?

Accounts receivable factoring is a type of financing where you sell your receivables to a factoring company for a discount. For startups the main benefit is that you get funded the same day you invoice your customers rather than having to wait 30 days or longer for them to pay you for goods or services that you have already provided them. As a result you have healthy cash flow so that you can take on more orders as well as larger orders without having to worry about how you will pay your suppliers. Since you are selling your receivables to your factoring company, the funds they provide you with are yours to keep, there is no need to repay your factoring company as your customers will be paying them once their invoices become due. As a result accounts receivable factoring is one of the few financing options available that doesn’t require you to take on any new debt.

Additional Benefits of Accounts Receivable Factoring

While improved cash flow may be the main reason a startup business would use accounts receivable factoring, it isn’t the only one. Since your factoring company is relying on your customers to pay their invoices in order to get repaid, your factoring company will also handle all of the credit checking for you. For a startup business the last thing you want to do is spend several thousand dollars subscribing to a credit agency so that you can determine whether or not an order you receive is from a credit worthy company. Your factoring company will also handle all of your collection work so there is no need for you to spend time making collection calls and no need to purchase accounts receivable management software. Finally, with non-recourse factoring, your receivables are insured against non-payment for financial reasons. So if one of your customers goes bankrupt or out-of-business you still get to keep the funds that your factoring company gave you.

How Does My Startup Business Qualify for Accounts Receivable Factoring?

Unlike a traditional bank loan, accounts receivable factoring is not a loan, your factoring is instead extending a line of credit to your customers. As a result, your factoring company isn’t too concerned with your company’s credit or your personal credit, but rather with your customer’s good credit. So as long as you are selling to reputable businesses you qualify for accounts receivable factoring.

How Much Funding Can My Startup Business Receive with Accounts Receivable Factoring?

With accounts receivable factoring there is no limit to how much funding you can receive. The amount you are funded is tied directly to how much you have in receivables. So as your receivables grow so does the amount of funding you receive. While your factoring company will assign credit limits to your customers, since you are not receiving a line of credit there is no limit to how much you can get funded.

So What’s the Catch?

Obviously there are fees associated with accounts receivable factoring and these fees can vary based on which factoring company you choose to factor with. At DSA Factors we offer a flat rate factoring fee, meaning that we do not charge you interest if your customers do not pay their invoices on time. The factoring fee we charge is very similar to a payment processing fee that you would pay to take a credit card. So if you can afford to take a credit card, you can afford to offer your customers net 30 payment terms with accounts receivable factoring. While every factoring company charges a factoring fee on each invoice they purchase, these rates do vary and you may be subject to other fees as well. At DSA Factors we do not have any annual fees, there are no fees for setting up new accounts, we have no minimum volume requirements, and we have no long term commitment. Please read our article on how to find the lowest rate for accounts receivable factoring to learn more about what types of fees you can expect to pay for factoring.

What if I Need Additional Help Financing a Large Purchase Order?

Sometimes waiting until you invoice to get funded isn’t enough, especially if you need to pay your factory for a container before they will release it. In situations like this your factoring company may offer you purchase order financing. Purchase order financing is a short term loan that allows you to pay for a container in order to fulfill a large order. Even though you may not qualify for a business loan, since you have developed a relationship with your factoring company, and you will be factoring an invoice as a result of the purchase order, your factoring company may be willing to give you a short term loan to finance the purchase order.

So How Do I Get Started With Accounts Receivable Factoring?

Factoring is a fast and easy process where credit decisions are made in minutes, not months. Getting started is easy, give DSA Factors a call today at 773-248-9000. With just one call you can be well on your way to getting the financing your startup business needs to succeed. We can be funding you for your invoices in as little as 24 hours.

Accounts Receivable Financing – Cash Flow for Start Ups

Accounts Receivable Factoring - Cash Flow for Startup BusinessesFor every new start up, it doesn’t matter how great your product is, but how well your business is funded. Without healthy cash flow it can be very difficult to grow your small business. With factoring, also known as accounts receivable financing, you can speed up your cash flow so that you can take on larger orders and grow your business. To learn more about factoring and start growing your business call DSA Factors today at 773-248-9000.

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.

Micro Factoring for Your Small Business

Micro Factoring - Funding Your Small BusinessMicro factoring is just like normal accounts receivable factoring, only it is on a smaller scale. If you are self employed, it can be very hard to find financing in order to grow your business. Even worse, as your business begins to grow, you are bound to experience a number of growing pains. While the most obvious growing expense may be rent as you outgrow your small office, basement, or garage, other expenses may include book keeping software, subscribing to expensive credit agencies, and you may even need to hire some employees to help you keep the business running. While micro factoring can’t help you cut your rent expenses, it can help you with cutting all those other expenses, while making paying the rent a little bit easier as well.

What is Accounts Receivable Factoring?

Factoring is simply selling your accounts receivable, or invoices, to a factoring company. So rather than needing to wait 30 days to get paid for a product or service you have already provided your customer with, when you factor your receivables you get funded the same day you invoice. The improved cash flow you receive can be used however you want since the funds you receive from factoring are not a loan.

Are There Additional Benefits of Accounts Receivable Factoring?

Besides the improved cash flow, factoring offers several other very important benefits. Your factoring company will handle all of your credit checking for you, eliminating the need for you to subscribe to expensive credit reporting agencies. You factoring company also handles all of your collection work, meaning that you don’t need to spend all of your free time making phone calls to customers who haven’t paid their bills yet. Plus, since your factoring company has a large client base, they most likely have several other vendors who sell to your customers meaning that they have more leverage in receiving prompt payment for your invoices. Finally, with non-recourse factoring, you also receive insurance on your receivables. That means that if one of your customers is unable to pay due to financial problems, you still get to keep the funds your factoring company gave you.

Who Can Benefit From Micro Factoring?

Micro factoring is great for new start ups and single employee businesses. With micro factoring you are able to receive the cash flow you need to grow your business without having to borrow the money or spend your own personal savings. It is also great for businesses that are growing as the improved cash flow can be used to pay your suppliers, rent, attend trade shows, or anything else.

Why Do I Need Micro Factoring?

For small businesses it can be very difficult to work with most factoring companies as they may require long term commitments and have minimum volume requirements. If your factoring company has a minimum volume requirement of half a million dollars, and you only factor a quarter of million dollars or less in any given year, then your factoring company will still charge you fees based on half a million dollars. With micro factoring you do not need to worry about meeting minimum volume requirements each year. Even if you only have $20,000 in annual sales, you only pay factoring fees on the invoices you factor. At DSA Factors we are proud to offer our factoring services to companies of all sizes and never have any minimum volume requirements. Furthermore, at DSA Factors we have no long term commitment, so you can stop factoring at any time and there is never any penalty for doing so.

What About Funding for a Large Purchase Order?

While factoring provides you with funds for merchandise that you have already shipped to your customers, sometimes it isn’t enough to help you taken on larger orders. Rather than turn down large orders from large retailers, with purchase order financing you can get a loan based on a purchase order so that you can produce the merchandise required for a large order. With purchase order financing you will receive a portion of the future invoice’s value up front so that you can produce the merchandise, and then when you actually ship the merchandise to your customer and invoice them, you will receive the balance of the invoice’s value. Even if you don’t have any large orders yet, it is important to factor your existing customers so that you have already established a relationship with your factoring company for when you do get that first large order.

Why Choose DSA Factors?

At DSA Factors we realize that we aren’t the only factoring company out there, but we offer exceptional service at very competitive rates. As on of the few family owned and operated factoring companies out there, you can always speak with one of our principals anytime you call, you will never just be handed over to an account manager. We have been factoring for over 30 years and understand the industry and what it takes to help our clients grow their businesses. We can handle any size client, we have clients who do as little as $30,000 in sales each year to clients who do millions in sales each year. Plus, we have no long term commitment so you can always stop factoring at any time if you decide that factoring isn’t right for your business. So give DSA Factors a call today at 773-248-9000 and learn just how easy it is to receive the funds you need to grow your business.

Invoice Factoring – Improve Your Cash Flow and Grow Your Business

Invoice Factoring - Improve Your Cash Flow and Grow Your BusinessInvoice factoring is the perfect way to improve your cash flow so that you can grow your business. Rather than waiting around 30 days to get paid for a product or service you have already provided, you can get funded the same day you invoice with invoice factoring. Factoring is not a loan, the funds you receive are your to keep. If you have accounts receivable, give DSA Factors a call today at 773-248-9000 and we can be funding you in as little as 24 hours.

Whether you are manufacturing, importing, or providing a service, with invoice factoring you can improve your cash flow. Allowing you to expand your customer base, and give you the confidence to soar your business to new heights. All it takes is one phone call and you can be on your way to growing your business!

What are you waiting for? Give DSA Factors a call today and start watching your business grow!

Most Popular Rooms in a Home

What is the most popular room in your house?When deciding a product that people will use in their home, it is important to understand how people use their homes. Whether you sell furniture, housewares, or giftware, your product needs to fit into your consumer’s lifestyle if you want it to be a success. With the average home containing seven rooms, tailoring your product to fit into a heavily used room could lead to increased sales. A recent survey conducted by Furniture Today gives a pretty good picture of which rooms people find to be most important.

Most Popular Room to Spend Time in

It should come as no surprise, but the living room is the room where people prefer to spend the most of their waking hours in their home. Nearly half of all people asked stated that they spend the most time in their living room. As a result over a third of consumers would like to get new furniture in their living room than in any other room in their house. While you may think that a third is low, it is important to consider that the living room is where we spend our waking hours, but that we sleep in our bedrooms. However, sleeping isn’t all we do in the bedroom, nearly half of all people charge their electronic devices, such as phones, in their bedroom, and 15% of consumers surveyed said that they spend more waking hours in their bedroom than anywhere else in the house. As a result, a quarter of all consumers would prefer to purchase new furniture for their bedroom over any other room in their house.

Other popular rooms to spend time in include the den, where another 15% of people say that they spend the most time. Home offices are most popular with 10% of people, and kitchens are most popular with 8%. However, only 1% of people say they spend the most amount of time in the dining room, and another 1% say they spend the most amount of time on their patio, deck, balcony, or other outdoor spaces.

Where do you Eat?

Of course, it isn’t just about where we spend time in our home, but also what we do in our homes. Eating, of course, is the one thing that everyone will do inside of their home, and if you sell dinette sets, tableware, silverware, or any other product that people use when they eat, you might want to take into consideration where people prefer to eat their meals before you design your next product.

When it comes to eating as an entire family, the dining room and kitchen are the most popular places to eat. 35% of families say they prefer to eat in the dining room, while 34% say that they prefer to eat in the kitchen. You may be surprised however that 22% of families eat most of their meals together in the living room.

When it comes to where you eat breakfast, lunch, and dinner, the numbers aren’t all that different.  The kitchen is the most popular room for breakfast and lunch, while dining rooms are the most popular (but just barely) for dinner. The kitchen is easily the room of choice for breakfast with 44% of people naming the kitchen as where they usually have their cereal and milk, that number drops to 35% at lunchtime, and drops even further to 29% at dinnertime. While you may think that this is because the dining room becomes more popular as it gets later in the day, that actually isn’t true. The dining room is most popular with 23% of people at breakfast time, but only 22% of people at lunchtime.  The dining room however gets its most use at dinnertime with 30% of people stating it as their room of choice. So it is actually the living room that becomes the most popular place to eat as it gets later in the day. Only 18% of people say they prefer to eat breakfast in their living room, but that number jumps to 23% at lunchtime, and up to 28% at dinnertime.

While the kitchen, dining room, and living room are the most popular places to eat, they aren’t the only place to eat. You’ve probably heard of breakfast in bed, and 4% of people say they prefer to eat breakfast in their bedroom, but you may be surprised that that same 4% also prefer to eat dinner in their bedrooms, while 3% prefer to eat lunch in their bedroom.  Other rooms where people eat include the den, which is the room of choice for about 6% of people. About 3% of people like to eat in their home office, with lunch being the most popular meal there. You may be surprised, but only 1% of people prefer to eat their meals outdoors, and this was a nationwide survey that questioned people in both warm and cold climates.

Funding your Product for the Home

Of course, it is one thing to have a great design for a product for the home, it is another thing to have the proper financing in place in order to produce and sell that product. If you are struggling to get your business off the ground, or you are experiencing rapid growth, accounts receivable factoring may be the solution you are looking for. Unlike a loan from a bank, accounts receivable factoring is fast and easy, and rather than looking at your credit and past sales, factoring companies look at your customers good credit. If you don’t qualify for a loan with a bank, or the bank can’t provide you with a large enough credit line, give DSA Factors a call at 773-248-9000 and with one simple phone call we can start funding your business in as little as 24 hours. There is no obligation or long term commitment, and the funds you receive from DSA Factors are not a loan. So call today and learn just how easy it is to grow your business with accounts receivable factoring.

Improve Your Cash Flow with Accounts Receivable Factoring

Improve your cash flow with accounts receivable factoringAccounts receivable factoring is a great way for small to medium sized businesses to improve their cash flow. However, unlike a loan from a bank, accounts receivable factoring offers you a whole lot more. With accounts receivable factoring you also can outsource all of your accounts receivable and let your factoring company handle credit checking and collections for you. Furthermore, with factoring you also get insurance on your receivables.

To learn more about accounts receivable factoring and how it can help you grow your business give DSA Factors a call today at 773-248-9000 or e-mail Ben at ben@dsafactors.com

Cash Flow Problems? Try Accounts Receivable Factoring.

Improve your cash flow with accounts receivable factoringIf your small business is struggling because of cash flow problems, accounts receivable factoring may be the solution you need. Rather than having your money tied up in receivables for 30 or more days, with accounts receivable factoring you get funded the same day you invoice your customers.

If your business can benefit from improved cash flow give DSA Factors a call today at 773-248-9000 and we can be funding you in as little as 24 hours.

How Accounts Receivable Factoring Works

How accounts receivable factoring worksAccounts Receivable Factoring is a simple and fast way of improving your company’s cash flow. When you get an order you submit it for approval, DSA Factors will provide you with a quick response. Once approved you ship and invoice your customer, and DSA Factors will fund you for your receivables that same day. After that DSA Factors handles all of your collection work and insures your receivables. Get started factoring today by calling DSA Factors at 773-248-9000 and we can be funding you in as little as 24 hours.