Invoice financing, also known as invoice factoring, is an alternative type of financial services to a standard business loan.
These short-term loans are issued by invoice sellers, such as banks and private financiers, who advance your unpaid invoices for quick access to cash flow.
Simply put, invoice financing enables companies to finance accounts receivable in advance of due payments.
Once your application process is approved, you can advance between 70% and 90% of the whole billed amount via invoice financing.
This enables SMEs and enterprises to obtain cash virtually immediately.
Thus, this allows you to improve working capital that would otherwise be locked in unpaid invoices.
It is a cost-effective and time-saving alternative for SMEs that require quick, short-term capital injection.
Try out invoice factoring today for consistent financing that allows you to pay your staff, suppliers, and reinvest in business operations and growth rather than waiting for customers to pay their invoices in full.
What is invoice discounting?
Invoice discounting is less commonly practised than invoice factoring.
The main difference between invoice discounting and invoice financing is that the former allows you to keep possession of your invoices.
Once you've invoiced your clients, you can send the slips to your preferred factoring company.
The lender will determine a final percentage of the total invoiced amount that you will be able to borrow. It will be given to you as a lump-sum payment or following normal credit terms.
After your clients have paid the invoices, you can refund the loan you were given back to the factoring company, along with any accrued interest fees.
How does invoice financing work with INFT?
This method for improved cash flow is quite straightforward.
You don't have to worry about any heavy invoice financing work!
To begin the invoice financing process, SMEs submit their verified invoices to INFT after invoicing their customers.
These invoices are recognised as collateral, and you will be eligible for a portion of the total billed amount as an advance.
INFT then pays the SME up to 80% of the invoice amount once approved.
Get an instant working capital upgrade with unpaid invoices that you already have!
Instead of paying you, your clients will have to pay the factoring company.
When the payment deadline approaches, we will collect the invoice amount directly from your customer before paying you the remaining 20% of the invoice value.
Do note that we will deduct a factoring fee and any processing fees that apply to the remaining invoice amount.
If you have any further questions about invoice financing and how it works, please contact our support team.
How do I become eligible for invoice financing in Singapore?
It's best if your business offers products or services on normal credit terms and your invoices are for completely delivered items or fully rendered services.
In order to take full advantage of invoice financing, your company should ideally offer payment terms of 30 to 120 days.
Generally, to be eligible for invoice financing in Singapore, your SME business must
be registered with ACRA
have at least a two-year working history,
and have a minimum annual income of SGD 500,000.
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