Factoring 101 Blog - Acounts Receivable Factoring and Other Industry News

The Factoring 101 Blog is your one stop destination for all things factoring related. With well over 100 posts dating back to 2011, if you have a question about accounts receivable factoring, purchase order financing, fintech, managing accounts receivable, or anything else, chances are you will find an answer to your question right here on the Factoring 101 Blog. If there is something that you can't find the answer to, or you want more information about it, please feel free to give DSA Factors a call at 773-248-9000 as we are always happy to help you with any questions you may have.

Finding the Lowest Factoring Rate

July 5, 2016

How to Find the Lowest Rate for Accounts Receivable Factoring
There are a lot of different accounts receivable factoring companies out there, and for most businesses looking to factor, the biggest concern is how much factoring will cost them...
Avoid The Pitfalls of Online Lending

Avoid The Pitfalls of Online Lending
Online lending, often referred to as Fintech, is becoming increasingly popular and is a major disruptor in the world of finance...
January 8, 2019

Purchase Order Financing vs Accounts Receivable Factoring

Purchase Order Financing vs Accounts Receivable Factoring
There are many different financing options available to businesses that could use improved cash flow...
May 3, 2017

Finance in the High Tech World

Factoring vs Fintech: Finance in the High Tech World
For most small business owners, obtaining a line of credit from a bank has never been easy...
December 30, 2016

What To Look For in a Factoring Company

December 31, 2018

What To Look For in a Factoring Company
Every accounts receivable factoring company is different, it is important to know the questions you need to ask when looking for the correct factor for your business...
Accounts Receivable Factoring Services

Accounts Receivable Factoring Services
Cash flow is typically the main concern for any company that is looking for accounts receivable factoring...
June 19, 2017

Micro Factoring - Funding Your Small Business

Micro Factoring for Your Small Business
Micro factoring is just like normal accounts receivable factoring, only it is on a smaller scale...
February 7, 2017

fixed rate vs adjustable rate accounts receivable factoring

Fixed Rate vs Adjustable Rate Accounts Receivable Factoring
There are two different types of rates that most factoring companies quote potential clients these days, fixed rate (or flat rate) and adjustable rate...
January 4, 2017

Purchase Order Financing vs Accounts Receivable Factoring

May 3, 2017

Purchase Order Financing vs Accounts Receivable Factoring
PO financing and factoring are considered alternative financing options, as the process is much faster and easier to obtain than a traditional SBA loan from a bank...
Purchase Order Financing and Accounts Receivable Factoring can work together to fund your business.

Factoring and PO Financing: Working Together to Fund Your Business
There are many different ways to fund your business out there, but choosing the correct funding method for your business can sometimes be difficult...
December 4, 2019

A Guide to Purchase Order Financing

A Guide to Purchase Order Financing
Explore the two most popular ways to obtain purchase order financing, from a purchase order financing company and an accounts receivable factoring company...
July 19, 2021

Accounts Receivable Factoring vs Fintech

September 1, 2016

Traditional Factoring vs Fintech
There has been a lot of talk about fintech lately. However, factoring has always been an alternative financing method, and has a long track record of success...
Fintech: Balancing Speed and Availability with Service and Privacy

Fintech: Balancing Speed and Availability with Service and Privacy
Fintech is becoming increasingly popular each year. The success of Fintech is primarily driven by the ease and speed of getting access to funding...
January 15, 2020

Accounts Receivable Factoring vs Supply Chain Financing

Accounts Receivable Factoring vs Supply Chain Finance
With each passing day it seems like a new technology is disrupting a traditional business model...
May 2, 2018

Accounts Receivable Factoring in many ways predates Fintech in the field of financial technology.

How Accounts Receivable Factoring Fits Into the Fintech World
It may seem strange that accounts receivable factoring, a form of financing that dates back further than the Silk Road, could fit into the modern world of Fintech, an industry that is less than a decade old...
May 9, 2017

A Guide to Net Payment Terms

December 18, 2019

A Guide to Net Payment Terms
Net payment terms are when you offer your customers a fixed amount of time to pay you back. Net 30 day terms are the most commonly used payment terms...
Having a good collections process is key to turning your receivables into cash, but that doesn't mean that you need to be doing the collecting.

Collections: Turning Your A/R Into Cash
You've developed a product or service that everyone loves. You've marketed it. You've sold it. Now all you need to do is get paid for it...
December 9, 2019

Nothing is worse than when you sell a product to your customer and then they don't pay you for it. The solution to this problem is to acquire credit insurance.

A Guide to Credit Insurance
For any business owner, there is nothing worse than when you sell a product to your customer and then they don't pay you for it...
January 7, 2020

Just like personal credit for consumers, businesses also have credit that can be used to determine their ability to pay for merchandise and services.

Performing Due Diligence: Credit Checking a Business
In the same way that we have personal credit that determines our ability to make purchases, businesses also have credit that can be used to determine their ability to pay for merchandise and services...
December 31, 2020

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Net 30-60-90 Day Terms: A Payment Plan for Businesses

It is quite common for consumers to be offered financing options when making a large purchase. While a home mortgage or car loan might be the first two things that come to mind with consumer financing, it is quite common for consumers to receive financing when purchasing other big ticket items such as furniture or appliances. Being offered a payment plan that allows a consumer to make monthly payments over a specified period of time allows them to purchase big ticket items that they may not be able to afford otherwise. However, in the world of B2B (business to business), payment plans are not available, instead businesses are offered net payment terms. With a net 30 day invoice, a business is given 30 days to pay, but must pay the entire balance after 30 days. Offering longer payment terms will benefit the company purchasing a product, but will hurt the vendor as they need to wait even longer to get paid or pay a higher fee to factor the receivable. However, there is a happy medium and that is offering net 30-60-90 day terms.

What is Net 30-60-90 Day Terms?

Net 30-60-90 day terms is a simple way of offering a business a payment plan. They pay one third of the invoice in 30 days, another third of the invoice in 60 days, and the final third of the invoice in 90 days. While it may not be the same as the 36 months a consumer gets to pay for a new sectional, it does still allow the business to spread out payments over three months and make smaller installment payments rather than pay the full balance all at once.

What are the Benefits of Net 30-60-90 Day Terms

From the vendor’s point of view, it is much better to offer customers net 30-60-90 as opposed to just offering them net 90 day terms. Receiving a portion of the invoice after 30 days, another portion after 60 days, and the balance after 90 days, instead of waiting for 90 days for the entire amount, helps improve cash flow. If the vendor is factoring the account, while they would get funded when the order ships in either scenario, they are able to reduce the factoring fees if they are offering net 30-60-90 day terms. Instead of having to pay a fee for net 90 day invoice, the vendor is effectively only paying a fee for net 60 day invoice since the payment terms average out to 60 days.

Another benefit of net 30-60-90 day terms over net 90 day terms is that is makes it easier for the customer to make the payments. Paying for a third of an invoice is always much easier than having to pay the entire balance. Even though the entire invoice still gets paid over 90 days, its oftentimes easier for a business to pay a smaller amount several times than to make one large payment all at once. For one it is much easier to budget for as it is smaller monthly payments, but there is also no need to set aside money each month for a large payment that is due in 90 days.

Do You Want to Offer Net 30-60-90 Day Terms?

If you feel you could benefit from offering your customers net 30-60-90 day terms but are worried about how it may affect your cash flow, now would be a great time to consider factoring. DSA Factors is a family-owned and run business that has been factoring for over 35 years. We work with a wide variety of industries and also have the ability to provide purchase order financing. Give us a call today at 773-248-9000, email us at info@dsafactors.com, or chat with us right here on this web page to learn more about how you can offer your customers more time to pay.

Small Business Factoring for Your Small Business

Small Business Factoring for Your Small Business

February 2, 2022

Running a small business is not an easy job, and while your business may be small, the decisions you need to make are oftentimes big ones. Of course, one of the most difficult decisions you will make is deciding how you are going to finance your business. While finding a financial partner may seem like a daunting task, especially since most banks probably aren’t willing to work with you, the truth is that are plenty of options out there available to you. To further complicate matters, there are many more companies out there that are offering these financing solutions to small businesses. So the tricky part is not just finding a solution that is right for you, but choosing the partner that is right for you as well. One important aspect to keep in mind is that you want a company that is willing to work with you to meet your needs in the same way that you are willing to work with your customers to meet theirs. Luckily, financing solutions are available to small businesses from other small businesses, so you know that you will receive the level of support you need to keep your business well financed and running smoothly...

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Financing Amazon Sales: Seller Central vs Vendor Central

Financing Amazon Sales: Seller Central vs Vendor Central

January 13, 2022

There is no denying that Amazon is one of the most important retailers to work with, and having your products available on Amazon is a great way to raise your sales volume. However, for most companies, a large increase in sales volume is not sustainable if they don’t have financing available. While there are financing options available for Amazon, it is important to understand that Amazon offers two very different ways of getting your products onto their site which they call Seller Central and Vendor Central. Depending if you are on Seller Central or Vendor Central will determine what types of financing may be available to you. Let’s take a deeper look at these two options, discuss the pros and cons of both, and see what sort of financing options will be at your disposal...

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Why Should I Offer Net Payment Terms?

Why Should I Offer Net Payment Terms?

November 26, 2021

For many small wholesalers, the decision to offer net payment terms is oftentimes one of the most difficult business decisions to make. While it may seem easier and safer to just take a credit card, from a customer’s point of view it is the exact opposite. There are even situations where credit cards may not even be an option. In order to determine whether it is time to start offering net payment terms to your customers, it is important to look at several factors. Why do customers prefer net sales terms, How do you take the risk out of net sales term, how to you manage accounts receivable, and how do you maintain healthy cash flow...

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