Manufacturer Financing Scenarios

Manufacturer Financing Scenario: Factoring invoices expedites working capital by speeding up cash flow, helping a manufacturer to grow more quickly.

How Factoring Solves the Problem of Cash Flow Financing for Manufacturers

A new manufacturer of outdoor furniture is approached by a large big box retailer. The retailer submits a large purchase order of outdoor furniture. In fact, it’s the largest purchase order the manufacturer has ever been asked to fill. What an opportunity!

The manufacturer agrees to produce the outdoor furniture requested by the retailer and does so for the price of $30,000. The manufacturer then submits a billing invoice for that amount to the retailer. The billing cycles for most large companies like the large retailer in this example, are 30 to 45 days.

While the manufacturer is waiting for payment from the large retailer, several other orders come in. The manufacturer needs immediate cash flow to fill the new orders.

The manufacturer chooses to factor – or sell – the invoice to invoice factoring company DB Squared.

We buy the invoice and the manufacturing company gets a check just one day after accepting our manufacturer financing proposal. We fund 98% of the face value of the invoice and hold the rest in reserve until their customer pays the invoice. Once the retailer pays us for the full amount of the invoice 45 days later, we also forward the remaining balance of the invoice to the manufacturer (called the reserve) less our manufacturer invoice factoring fee. (Our factoring fees usually range from 1-5%.)

With the ability to access the money their customer owes them right away, the manufacturer is able to purchase the inventory, pay operating and payroll costs and fulfill the other new orders that came in.

By speeding up cash flow, a manufacturer can grow their business more quickly and take advantage of new business opportunities, instead of waiting for working capital to come in weeks – and sometimes months – after customer invoices are generated.

Manufacturer Financing: Invoice Factoring Improves Cash Flow – Fast!

Invoice factoring, also called receivables financing (or A/R factoring), solves cash flow challenges by unlocking the working capital represented in a manufacturers receivables.

Manufacturers factoring invoices with DB Squared can access the money owed them by their customers, without waiting for those customers to pay.

Find out more about invoice factoring, or read the manufacturer financing scenario and find out how this centuries-old B2B financing option expedites cash flow by unlocking the money represented in unpaid customer invoices, without forcing customers to pay more quickly.

Access to Working Capital is Just One Benefit of Factoring Invoices

Improving cash flow financing accounts receivable invoices is just one of the benefits of this form of manufacturer financing.

Organizations that factor their customer invoices with a non-recourse factoring company like DB Squared also reduce their financial risks, because non-recourse factors assume the credit risk for the invoices they purchase. In this way, factoring also helps to reduce or eliminate bad debt for a manufacturer that finances receivables with a non-recourse factor.

Manufacturers that choose DB Squared enjoy the additional benefits of non-recourse factoring, at rates comparable to supply chain factoring companies that factor with full recourse.

Find out more about recourse vs. non-recourse financing or use the quick quote form below to request a free, no-obligation quote for manufacturer invoices factoring services. You could go from approval to your first funding in a matter of hours, giving you immediate access to the money you need to grow and operate your business.

Financing for Manufacturers: Why Choose Us?

Use our online factoring opportunity cost calculator to see how much working capital is tied up in your accounts receivable invoices – money you could use to grow your manufacturing business.

Opportunity Cost Calculator

Use our invoice factoring calculator to determine whether factoring receivables could expedite cash flow in your business.

  • Your Current Total Accounts Receivable
    $1,000 $5,000,000+
  • Your Average Customer Invoice Amount
    $0 $250,000+
  • Advance Rate for Factored Invoices (Advances usually range from 85-98%)
    85% 98%
  • Factoring Fee (Factoring fee usually ranges from 1-5%)
    1% 5%

Apply Now

  • Expedite working capital tied up in customer invoices, without waiting for customers to pay Working Capital Unlocked $0
  • Average Factoring Fee $0

Request a Quote

Why manufacturers choose DB Squared for supply chain financing using invoice factoring: 

  • Factoring rates from 1-5%
  • Advances on factored invoices from 85-98% – or even more
  • No long term factoring contracts or hidden penalties
  • No monthly minimums
  • Prompt, professional customer service
  • Approved to factor with us? Get same day funding for factored invoices!
  • No application fees, credit check or due diligence fees
  • No funding or notification fees
  • No hidden fees to surprise you
  • Retain control of invoicing your customers or let us do the work for you – the choice is yours!

Request a free, no-obligation quote for manufacturer financing:

Go from approval to funding in 24-48 hours – or even faster.

Grow Your Business Faster with our Manufacturer Financing Tools

Factoring Invoices is a Great Option for Fast-Growing Manufacturers

Often, open invoices are one of the largest tangible assets on a company’s balance sheet. Rather than waiting 30 days or longer to be paid, it makes sense to sell the invoices.  This type of financing won’t show up as additional debt on a company’s balance sheet, so companies maintain their flexibility for obtaining other types of long-term financing. Factoring can be a great option for fast growing and seasonal companies.”

—Tom Glazier, VP Operations, DB Squared