DSA Factors

What is Accounts Receivable Factoring?

Invoice Factoring, also known as "Accounts Receivable Financing", is when you sell your accounts receivable to another company.

Invoice factoring is simply selling your accounts receivable (or invoices) to another company known as a "factor". Often times this is known as accounts receivable financing. If you offer terms to your customers, whether they are net 30 days or longer, then you are an ideal candidate for invoice factoring.

When you factor your receivables you sell them at a discount and in exchange DSA will advance you funds for them that same day. DSA will also handle all of the collection work for you, and our non-recourse factoring means that your receivables are insured if one of your customers can't pay for financial reasons.

DSA offers its clients a low flat rate fee for its invoice factoring services. While other companies may offer incredibly low rates for their services, they will charge you interest for the amount of time it takes them to collect and for the funds to clear the bank. At DSA we will never charge you any interest no matter how long it takes your customers to pay, when you work with DSA you know exactly how much you will have to pay.

Invoice factoring is not a loan, and you will not assume any debt by factoring your invoices. Therefore, there is no lengthy application process, and approval is based on your customers credit and ability to pay rather than your own.

When you factor with DSA you also can rest assured that you will get paid for your invoices. You no longer need to subscribe to credit agencies, DSA will do all of the credit checking for you, most of the time we are already familiar with your customers and have established a line of credit for them.

Since we handle all of the collection work, you no longer need to worry about making collection calls. Furthermore, since DSA factors for a large number of companies, we have much more leverage in collecting than you would on your own. If a customer doesn't pay you then they simply need to find a new vendor, if they don't pay DSA they may need to find 5, 10, or even 20 new vendors.

How Invoice Factoring Works

3 Simple and Easy Steps

Step 1

Approval Request

Submit your orders for approval here on our web site. Most orders are approved instantly online, but for those that aren't we will try to get back to you within 30 minutes. We never look for a reason to turn down your accounts, instead we look for reasons to approve them. We are very proud that our approval rate is over 95%.

Step 2

Ship & Invoice

Once you have an approval number you can go ahead and ship out the merchandise or perform the service. At the same time you should send us a copy of the invoice and backup documents. You will also need to send an invoice to your customer with our assignment stamp on it.

Step 3

Relax!

As soon as DSA receives the invoices we will process them and send you the funds within 24 hours. DSA fully manages the receivables including making the collection calls and supplying you with weekly aging statements of your accounts. Our non-recourse factoring means that you are not responsible if a customer can't pay for financial reasons.

Key Benefits of Accounts Receivable Factoring

Accounts receivable factoring can help companies of all sizes, from start-ups to mature companies:

  • Improve cash flow
  • Eliminate bad debts
  • Reduce operating expenses
  • Expand working capital financing
  • Improve management information
  • Eliminate the need for bank loans or SBA loans
  • Alleviate time consuming activities such as credit checking, bookkeeping, and collections

Additional benefits you receive when you factor your receivables with DSA Factors:

  • We have worked with numerous types of businesses over the past 25+ years!
  • Funding within 24 hours!
  • Credit Approvals in as little as 30 minutes!
  • Generous credit limits!
  • No minimum factoring requirements!
  • No long term commitment!
  • With our flat rate fee, you never have to pay any interest!

Companies that can benefit from invoice factoring include those that are:

  • Rapidly growing
  • Seasonal
  • Start-ups
  • Undercapitalized
  • Spin-offs
  • Concerned about adding fixed costs
  • Have a lengthy manufacturing cycle
  • Strained by slow turnover of receivables
  • Hurt by high bad debt losses
  • Saddled with a large customer concentration

Reasons you should consider invoice factoring:

  • Unlimited Capital
  • Elimination of bad debt
  • Leverage off your customers' credit
  • Factoring is fast and easy
  • No debt incurred
  • Offer credit terms to your customers
  • Establish good credit for your business
  • Professional collections

Let us answer your questions regarding the essential benefits of our accounts receivable funding and cash flow financing program, including all costs and ease of start-up. At DSA you can always speak with a principal, we will never hand you over to an account manager. You can try us out with no long term obligations, so call today.

Is Accounts Receivable Factoring right for my business?

I am a new start up

One of the most important times to use invoice factoring is when you are a new start up. Most new start ups experience a lot of large expenses in setting up their new business such as rent, inventory, equipment, software, advertising, trade shows, and anything else you may need to get your business off the ground. The last thing you want after you make a sale is to wait around 30 or 45 days or even longer to get paid for your merchandise or services. Furthermore, as a new start up you aren't familiar with any of your customers yet, how do you know if they will even pay you in 30 days when the invoice is due. By factoring your accounts receivable not only do you speed up your cash flow, but you are working with an experienced partner who is already familiar with most of your customers and will guarantee your receivables and do all of the collection work for you. Even if you subscribe to an expensive credit agency, there is no guarantee that you will get paid and you'll be spending all of your free time making collection calls.

Furthermore, as a new start up, it can be very difficult to get a bank loan, after all you haven't had a chance to establish credit yet. However, at DSA Factors we are more concerned with your customers credit than with yours. Even if you have no credit, we are happy to work with you to get you the cash you need.

My business faces seasonal demands

For many businesses seasonal demands can create huge problems. If all of your sales come in over a short busy season, you may have a hard time paying your suppliers. When you factor your invoices with DSA Factors, these seasonal cash flow problems go away. DSA will advance you funds as soon as you invoice your customers.

Whether you sell outdoor products for the summer or winter, Christmas, Halloween, or any other holiday decorations, or licensed merchandise for MLB, NBA, NFL, NHL, or NCAA, you no longer have to worry about paying your bills when all your orders go out for the year, but none of your customers have paid you yet.

We are experiencing a period of growth and expansion

There is nothing better than when your company is going through a period of growth and expansion, and nothing more stressful than trying to keep up with growing demand. From needing larger warehouses to hiring more staff, expansion can be very difficult for many businesses. By factoring with DSA Factors we can alleviate most of these worries as your increased sales mean that we will be able to advance you even more funding.

The funding you receive from DSA Factors can be used to pay for anything you need from payroll to rent to advertising and everything in between. If you are experiencing growth and expansion, now would be the perfect time to give DSA Factors a call.

All of our customers pay on credit card

While a credit card payment is fast, easy, and guaranteed, you may be missing out on picking up larger accounts and getting bigger orders. Your customers know that when that credit card bill comes they better have the money to pay it or they are going to start seeing late payment fees and high interest rates, as a result they may be hesitant to place too large of an order out of fear that they can't pay for it by the time that their credit card statement arrives. However, when you offer your customers terms, they still have 30 days to pay, but they also know that if they pay a little late they won't be assessed late fees and interest, as a result they might be willing to place a larger order. Besides, if you want to sell to places like Walmart, Target, Amazon, or any of the other national retailers, they probably aren't going to offer you a credit card.

By factoring your invoices with DSA Factors, you have nothing to lose and everything to gain. Our rates are comparable to credit card rates, you receive your money just as fast, and it is still guaranteed. The only difference is that you can start getting larger orders when you start factoring with DSA.

I have cash flow problems

If you need to speed up your cash flow then accounts receivable financing is what you need. Instead of waiting around for your customers to pay you in 30, 45, 60 days, or even longer, DSA Factors will advance you your money the same day you ship and invoice.

When you factor your invoices with DSA Factors, you no longer need to worry about taking larger orders, paying your suppliers, or simply making payroll. You can be confident that the money will be in your account and available to use within 24 hours!

Offering terms has caused me trouble in the past

Many companies are afraid to offer terms because they may not have always been paid in the past. By partnering with DSA to factor your accounts receivable, these problems will go away. With our large database of over 60,000 companies accross the US and Canada, odds are we are already familiar with most of your customers and probably have several clients who sell to them. We also subscribe to credit agencies whose data we combine with ours to keep up us on top of everything.

Of course, by using our non-recourse factoring, you have nothing to worry about. We will do all of the credit checking for you, we will handle of all your collection work, and we guarantee payment, so even if we don't get paid you still get to keep your money.

I can't get a loan from the bank

Are the banks turning you down, taking too long, or require too much documentation? No problem, we can get you set up, approved, and start funding your receivables in as little as 24 hours.

At DSA Factors we don't make decisions based on your credit, but rather on your customer's credit. As a result we can get you set up with minimal information. Because we have been around for over 30 years, we are probably already familiar with most of your customers, and even if we aren't we can get them approved in as little as 30 minutes.

Invoice Factoring versus a Bank Loan

Accounts receivable factoring is not a bank loan.

Below is a quick look at how accounts receivable financing differs from a bank loan

Invoice Factoring with

DSA Factors

Traditional Bank SBA Loan

DSA Factors

At DSA Factors we pay you for your invoices, it is not a loan. We will never charge you any interest no matter how long it takes us to get paid by your customers.

If you have a bank loan interest compounds monthly. If you don't pay off the loan quickly you may wind up owing more money in interest than you actually borrowed.

When you factor with DSA you have no credit limit, we will send you an advance for all of your receivables. So the more you sell, the more funds you receive.

When you have a loan with a bank they give you a credit limit, and if you need more money you have to reapply for another loan.

Approval at DSA is based not on your credit but on your customer's credit. Even if your credit isn't perfect, if your customers have good credit, you will get an approval.

Approval from a bank is based strictly on your credit. If you have bad credit, or even just OK credit, you can pretty much forget about getting approval from a bank.

With DSA Factors, we can get you set up, approved, and send you money in as little as 24 hours. All we require from you is a short application and to sign a simple two page agreement.

Banks can take months to make a decision on a small business loan, and they will require you to submit all sorts of financial statements that might take you a month just to put together.

There is no term to how long you can factor with DSA. We have clients who have been factoring with us for over 20 years, and they've never had to sign another contract from when they first started up with us. We also have no minimum term, so you can stop factoring at any time and since factoring isn't a loan, you have nothing to pay back.

A small business loan from a bank comes with a term. When that term is up you have to pay back the loan along with all interest that has accumulated on it. If you don't have the money you'll have to make sure that you secure another bank loan before the current loan's term is up.

DSA Factors will handle all of your collection work and our non-recourse factoring means we insure all of your receivables.

A bank doesn't help you out with your receivables, and they offer no insurance.

DSA Factors will provide you with weekly agers, and gives you online access to a wide variety of real-time reports that can help you track your financials as well as make sales.

A bank will send you an account statement and bill each month, just like you would get with a mortgage or car loan.

Non-Recourse vs Recourse Factoring

There are two different types of factoring, you can either factor with or without recourse.

DSA Factors is proud to offer Non-Recourse Factoring to our wholesale clients.

Below is a description of the difference between the two options.

Non-Recourse Factoring

With non-recourse factoring you aren't just speeding up your cash flow and outsourcing your accounts receivable, but you are also insuring your accounts receivable.

In a perfect world when you invoice a customer they would pay you when the invoice is due. While many of your customers do this, unfortunately we all know that this isn't always the way it works. Sometimes one of your customers might go bankrupt or out of business and are unable to pay their bills. Other times you might just have a customer who is a deadbeat and doesn't pay anyone. While we do track the credit of all of your customers, and look at payment trends as part of our approval process, sometimes we will approve a customer who isn't able to pay. When this happens it is good to know that we take full responsibility for the receivables. Even if we never get paid on an invoice, you still get to keep the funds that you received.

While there are plenty of companies out there who offer insurance on your receivables, most of them won't approve any companies that aren't a sure bet. That means, unless your customer's name is Walmart, they won't offer you insurance. At DSA Factors we understand that simply approving the Walmarts isn't enough. We will insure everyone from big to small, online or brick and mortar, American or Canadian. We have an over 95% approval rate and are very proud of that. It would be very hard to find an insurance company, or even another factoring company, with an approval rate that high.

Recourse Factoring

With recourse factoring you still get improved cash flow and are still outsourcing your accounts receivable, but you do not get the insurance that is included with non-recourse factoring.

Factoring with recourse will still provide you with cash flow, but it won't provide you with a safety net in case one of your customers doesn't pay. Typically when you factor with recourse, if an invoice becomes 90 days past due, the invoice will be charged back to you.

While we will always do continuing credit checks and monitor payment trends for your customers, no one is perfect and every now and then a company who may not be able to pay will slip through the cracks. While your factoring company will still work hard to get your customer to pay, sometimes there isn't a whole lot you can do when a business files for bankruptcy or closes up. Unfortunately when this happens and a company is unable to pay, if you are factoring with recourse this becomes your responsibility, and you may be asked you to buy back the invoices.

Typically companies in the service industry receive recourse factoring. And while these companies may not receive the same insurance that companies selling merchandise receive, DSA Factors will work very hard to make sure that all of their invoices get paid. Charging back an invoice to a client is not something that is taken lightly, it is something that happens less than a third of a percent of the time.

Frequently Asked Questions about
Accounts Receivable Financing

What will my customers think if they see I use a factor?

Most of your customers won't think anything of it as they are already used to dealing with factoring companies and are probably already familiar with DSA. If anything, by having a factor that is willing to work with you, it proves that your finances are in order and will be able to be a supplier for many years to come.

How is accounts receivable funding different than a loan from a bank?

When making an accounts receivable funding decision, DSA focuses on the credit worthiness of your customers while banks will focus on your company's financial history and cash flow. Accounts receivable funding is not a loan. It provides you with less debt on your company's balance sheet. We can make a quick funding decision, while banks may take weeks or months to approve a loan.

Will my company be eligible for accounts receivable financing if it has a bank loan or line of credit?

If a bank has a lien on your company's accounts receivable, you should let us know right away. We will ask the bank to subordinate that lien. Some banks will accommodate the request and others may decline depending on your circumstances. Our number one source of referrals comes from loan officers willing to help out the client in cash flow needs. They are very familiar with this kind of financing. The other alternative is to pay off the loan if there are plenty of receivables to leverage the buy out.

What information will you need from my company to begin the accounts receivable factoring process?

A short application, your company's most recent accounts receivable and accounts payable aging reports, Articles of Incorporation or d/b/a filing, a master customer list and a sample invoice.

Which customers would be good candidates for accounts receivable funding?

Usually 80% of your business comes from 20% of your customers and these would be the most likely to factor, however, we will factor 100% of your customers so long as they are credit worthy. In order to approve your customers, we will need their names, addresses, phone numbers and the amount of the order for each customer.

Can you purchase only a portion of my company's invoices or one customer?

Yes, so long as it is not a one time deal.

How long does it take to receive the first funding?

The initial funding takes between 1-3 business days after we receive your signed agreement. If you wish, you can send some invoices to be funded with the signed contract in order to expedite your funding. After the initial funding, your company can receive funds within 24 hours after invoice receipt.

How much of my company's accounts receivable can be funded?

We can fund up to 100 percent of your company's creditworthy accounts receivable .

How can I be certain that your company will treat my customers well?

The last thing we want is for you to lose a customer. We are not a collection agency. We will never harass your customers for money. Maintaining your customers' goodwill and confidence are of utmost importance to us!

Is invoice factoring a new industry?

No, invoice factoring has been around for over 500 years, and is very popular in England as well as other European countries. Factoring in America goes back to before the Declaration of Independance. At DSA Factors we may not have factored for Benjamin Franklin, but we have been factoring for over 30 years and can provide you with the experience and knowledge you need to grow your business and put a lot of Benjamins in your wallet!

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

 

Apply Now!

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