Latest / Cash Flow Conversations with Fexingo: Working Capital, Receivables, and Small Business Finance
Why Dynamic Discounting Beats Invoice Factoring
In this episode, Lucas and Luna explore dynamic discounting, a financing strategy that lets buyers offer early payment discounts that increase as the payment date approaches, creating a win-win for both sides. Using the example of a mid-sized manufacturer named Precision Components, they walk through how a supplier can turn a 2/10 net 30 discount into an effective annual return of over 20 percent, versus the typical 10 to 15 percent cost of factoring. They also discuss why technology platforms are making dynamic discounting more accessible to small suppliers, and how the strategy changes cash…
The skinny
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