Factoring 101 Blog - Acounts Receivable Factoring and Other Industry News

Factoring Facts

Factoring is basically invoice discounting for the purpose of speeding up cash flow. It has become a legitimate way for growing businesses to obtain loan funding without the need to provide security over physical assets of the business or personal assets such as the home.

Financial institutions are recognizing the importance of offering small to mediums size enterprises an alternative means of funding that does not include security over fixed assets. However, even though they recognize this need, it still may not be something they can handle. Factoring has become a major source of funding for businesses, since banks have been restructuring their service offerings to companies with limited access to funds based on accounts receivable.

How factoring works

Factoring provides a fast prepayment for your invoices billed to your customers. It allows you, at a cost, to flexibly increase your working capital and improve cash flow by effectively selling your newly billed invoices to a factoring company.

Factoring is offered to companies selling to other businesses on credit terms. It is not normally available to retailers or to cash traders.

You need to receive credit approvals for your customers in advance of the funding. Once you have shipped the merchandise, you bill the customer with a notification instructing them to pay the invoice directly to the factor. The Factoring company does all the collection work and alleviates your need to make phone calls or send out past due notices. This will allow your company to spend your efforts on growing your business instead of making collection calls.

Factoring is easy as 1 - 2 - 3
Why Invoice Factoring Is Better Than A Business Loan

Contact Us Today

DSA Factors - Money to Make Your Company Grow!

PO Box 577520
Chicago, IL 60657

 773-248-9000

 773-248-9005

 info@dsafactors.com

 

Contact Us Online!

DSA Factors
International Factoring Association


All product and company names are trademarks™ or registered® trademarks of their respective holders.
Use of them does not imply any affiliation with or endorsement by them.