What are the Benefits of Factoring?

Factoring invoices allows an organization to expedite cash flow. Faster cash flow might be the main benefit of factoring, but it is not the only benefit this financing tool has to offer.

What Are the Benefits of Factoring Receivables?

Receivables are a valuable asset that you can leverage to grow your business.

Invoice factoring allows your company to expedite cash flow by turning the money customers owe you into available cash. Rather than waiting weeks – or months – for customer invoices to be paid, you can receive cash for factored invoices immediately.

Another benefit of factoring receivables is that it enables you to offer more appealing credit terms to your clients without slowing down organizational cash flow, which may provide your business with a competitive advantage.

Invoice factoring allows your business to enjoy immediate access to working capital and replenishes cash flow more quickly, which makes managing your day to day expenses much easier. You might also be able to leverage faster cash flow to negotiate better terms with your organization’s vendors and suppliers.

Plus, unlocking working capital expedites your cash flow on a more consistent basis, giving you the opportunity to confidently pursue bigger clients and new business opportunities.

How to Access the Benefits of Factoring Receivables

Nearly any type of B2B organization may be eligible to access the benefits of factoring receivables, including those that invoice customers for payment as well as other business models, such as manufacturers and third party sellers whose goods or services are sold through ecommerce retail sites, app stores and other resellers.

How receivables financing with DB Squared works:

Your company provides a product or service to another business, government agency or another type of organization, or your goods or services are sold through another platform. Upon fulfillment, an accounts receivable invoice is created or promise of future payment is made to you by a third party.

Instead of having to wait for weeks or months to receive payment, you factor the invoice (or promised reseller payment) to DB Squared for a small fee, called a factoring fee, which usually ranges from 1-5%. In return, you get immediate access to working capital in the form of an advance, which may be as high as 98% of the invoice or payment amount – or even higher. Once your customer remits payment for the invoice, if any amount has been held in reserve, it will also be released back to you.

Use the receivables financing calculator to determine how much working capital your organization could access by factoring receivables, instead of waiting for customers to pay.

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Receivables Financing Calculator

Use the receivables financing calculator to determine how much working capital your organization could access by factoring receivables, instead of waiting for customers to pay.

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+
    $0
  • Your Average Customer Invoice Amount
    $0 $250,000+
    $0
  • Advance Rate for Factored Invoices (Advances usually range from 85-98%)
    85% 98%
    0%
  • Factoring Fee (Factoring fee usually ranges from 1-5%)
    1% 5%
    0.50%

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

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Benefits of Factoring: Receivables Financing Scenario

Receivables financing scenario: Let’s say that you recently completed a job for one of your customers for a flat fee of $3,000.  Here’s how the receivables factoring process might look (assuming a 1% factoring fee and 98% advance rate):

benefits of factoring receivables explained

Invoice your customer $3,000, factor the invoice with us, and get a same day advance of $2,940 ($3,000 invoice amount – 1% factoring fee and 1% reserve).  Then, once the invoice has been paid by your customer, receive the $30 held in reserve.

No more chasing customer payments or sitting on the sidelines waiting for payments to come in so you can reinvest in business growth!

Request a Free, No-Obligation Quote for Receivables Factoring

Get answers in 24-48 hours – or even faster

Enjoy the Benefits of Factoring Receivables with DB Squared

Accessing the benefits of receivables factoring is as simple apply for a free, no-obligation factoring proposal. You could go from approval to your first funding in as little as 24-48 hours!

We are confident that once you choose DB Squared as your invoice factoring company that you will want to stay with us – and we will work hard to make that happen.

Finding out whether factoring can benefit your business costs you nothing – waiting costs you time and money!

Our team has more than 100 years combined experience in invoice factoring. There are no hidden costs or surprises when you factor invoices with us. Plus, as a non recourse invoice 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.

  • Factoring fee as low as 1%
  • Advances up to 98%
  • Free same day funding
  • No hidden fees
  • Free credit checks on your customers
  • No application, due diligence or proposal fees
  • No notification fees
  • No factoring minimums – factor only when you choose!
  • No long term contracts – we want to earn your continued business
  • High level of customer service
  • Dedicated account managers that understand your business