Invoice Factoring for Delivery Service Companies

E-commerce retail and online grocery stores are giving birth to new transportation companies specializing in delivery services.

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Invoice Factoring for a New Breed of Transportation Companies

 

Like their long-range trucking counterparts, retail and grocery delivery companies may be able to speed up cash flow by factoring invoices, instead of waiting for e-commerce customers to pay.

Can Delivery Service Companies Factor Invoices?

Factoring helps companies speed up cash flow by giving them access to the working capital that would otherwise be locked up in customer invoices or promised payments.

Delivery service companies that are contracted to provide delivery services, and then are paid on terms by grocery stores, retailers, or e-commerce sellers may be able to expedite cash flow by factoring instead of waiting on these types of payments for 30, 60, 90 days or even longer.

Here’s how it works:

  • Delivery services are fulfilled over the course of a month. At the end of the month, a customer invoice is generated for the delivery services filled or a statement of earnings is issued.
  • On the same day the invoice is generated or an earnings statement is available, it is factored with us, and payment of up to 98% of the invoice amount (or earnings statement) is made by us to the delivery services company in return for a low fee (called a factoring fee). The factoring fee might be as low as 1%.
  • Once the invoice or earnings statement payment has been received, any amount held in reserve is also returned to the delivery services company.
DAY ONE $25,000.00 $25,000 invoice or earnings statement is generated and factored with DB Squared
$24,500.00 $24,500 (98%) of the invoice or earnings statement amount is paid to the delivery services company
$     250.00 1% factoring fee is earned by DB Squared
DAY 30-60-90+ $     250.00 1% held in reserve is returned to the delivery services company after invoice or earnings statement is paid in full

 

Cash in hand, the delivery service provider can focus on expanding their fleet, hiring more drivers and growing more quickly. We would be happy to give you a free, no-obligation quote so you can determine whether your delivery company could benefit by factoring invoices (or earnings statements) instead of waiting on customer payments.

How Invoice Factoring Benefits Delivery Companies

Many B2B service providers use invoice factoring to speed up cash flow. Delivery companies that invoice e-commerce or retail customers on a monthly or quarterly basis, and then wait on payments for 30 days or longer could reap many of the benefits of invoice factoring; such as expediting cash flow in order to:

  • Better align expenses and revenues

Much like temporary employment and staffing agencies, delivery service companies that hire and pay drivers often need to expend significant resources on hiring, training, payroll and benefits in advance of corresponding customer payments. Factoring invoices speeds up cash flow so that revenue needed to pay for these expenses comes in sooner. Factoring can be especially beneficial as a payroll funding resource to help ensure that cash is on hand adequate to fund payroll, keeping drivers, dispatchers and support staff happy and on the job.

  • Take on new business more quickly

Growing a transportation company that specializes in delivery services doesn’t just mean hiring drivers more quickly. The cost of new vehicles, fuel, tires, vehicle maintenance and repair as well as costs for marketing and advertising can be offset more easily by delivery companies that factor invoices instead of waiting weeks (or months) on customer payments.

  • Get new customers

In addition to the quality of service a delivery company provides, the payment terms it can offer new customers can play a big part in whether they land new clients. When a company factors invoices, they don’t have to worry about how quickly customer payments come in, so they can extend generous payment terms to clients as a marketing advantage.

The easiest way to find out whether transportation factoring could benefit your delivery company is to reach out for information. We’ll provide you with a free, no-obligation quote for transportation factoring services so you can find out how much working capital you could unlock immediately using this cash flow financing tool.

Why Choose DB Squared Among Transportation Factoring Companies

When choosing among transportation factoring companies, low factoring fees and high advances are just one aspect of factoring that can positively impact your company. We choose to serve clients with a view to the long term, earning client business (and continued patronage) as well as referrals by how we do business, instead of locking clients in to long term contracts and factoring minimums that might not be what’s best for their organization.

Our team has more than 100 years combined experience in transportation industry factoring. There are no hidden costs or surprises when you factor invoices with us. Plus, as a non-recourse factoring company, we assume the financial risk for unpaid invoices (unlike recourse factors). which can reduce – or even eliminate – your organization’s financial risk from bad debt.

When you choose to factor with us, you can expect:

  • A low factoring fee – as low as 1% – that is your “all-in” cost, with no hidden fees
  • Competitive advances of up to 98% of an invoice or earnings statement amount
  • Free, same day ACH funding on factored invoices or earnings statements
  • The ability to run free credit checks on your customers day or night, online
  • No application, due diligence or proposal fees
  • No notification fees
  • No factoring minimums – factor only when you choose!
  • No long term contracts or lengthy auto-renewal clauses

We strive to provide a high level of customer service day in and day out. As our client, you will have a dedicated account manager who understands your business and its financial goals.

Request a Free, No-Obligation Quote for Invoice Factoring

Expedite cash flow by factoring invoices instead of waiting on payments.

More Financing Tools for Delivery Service Companies

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Invoice factoring is just one of the tools that might help you grow your delivery services business more quickly.  Reach out to us for information about any of our business financing tools or explore your options by requesting a free, no risk or obligation quote for:

  • Invoice factoring
  • Business cash advances
  • Merchant cash advances
  • Equipment financing for transportation fleet or business expansion
  • Business line of credit

Each of these business financing tools has its own advantages that might make one more appropriate for your organization. We would be happy to give you more information about our programs so you can choose the best financing options for your delivery services company.

We want to earn your continued business and referrals.  No matter which of our programs you utilize, you will find that we will take a long term view, look beyond credit scores or balance sheets, and work hard to customize and tailor financing options to the unique needs of your business.

Apply online and you could go from approval to funding in hours – and get access to the working capital you need to grow your business more quickly.