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Some do require deposit accounts and most require reserves simply based on the nature of the business. For instance we do not require any type of deposit account. However this is where things get tricky. Because we receive payments on invoices litterally everyday are reserve account payments are issued every other Friday. The concept is simple, when we purchase an invoice we typically give our client 80%-90% of the invoice face value that day. We then wait to get paid. Once we’ve been paid we deduct our one time factoring fee and the difference is then deposited into your reserve account. As I said the proceeds from this reserve account are transferred to your bank account every other Friday. This policy is simply in place because it would be nearly impossible to to pay out the difference on a daily basis and still continue to meet the daily needs of new funding requests. Some clients literraly send over a hundred invoices in a month. Thus the cause for reserve payments. Please email me if you have any other questions at: stephen.ray@dbsquaredinc.com
Thanks!