Factoring Company In Singapore
What is factoring?
Factoring is a financial service where you sell your receivables account to a third party. In return, you receive upfront funds based on your receivables accounts. This party is known as a “factor”. A factor can be a person, company, a financial institution that offers such financial services. Usually, companies and business owners make use of this service by selling their outstanding invoices to a factor to receive immediate funding.
Factoring is different from traditional bank loans and other similar options that avail funding for your company or business. Unlike bank loans, there is no application fee or processing fee charged by the factor to initiate their services. Instead, they charge a small fee as their financial services in a later stage. Once the application procedure is successful and the verification process is over, the factor proceeds to pay you an upfront amount equal to 80-90 % of your invoice amount and then collects the invoiced amount from your customers. Once the customers clear the invoices, the factoring company then pays you the rest of the amount minus a fee. This process can especially help small businesses to meet their needs for capital without waiting for their receivables to be paid.
For example, let’s say you run a small business.
- You have an existing customer to whom you ship your products.
- You have reached an agreement where your customer has promised to pay the company in 90 days time after the shipment of the product.
- In the meantime, you receive a bigger opportunity where you require scaling up the production.
- You fall short of working capital to expand the business to meet the requirements of this deal.
- You reach out to the factor, fill the application and sell them your unpaid invoices from the existing customers.
- If you pass the eligibility criteria, the factor can make an 80% upfront payment based on your invoices made to your customer.
- Your customer will be paying their debts directly to the factor and you can continue to provide more quality service without interruption/delay.
- The factor pays the remaining 20% of the invoices, deducting a nominal fee once your customer pays the invoices to the factor.
This is how factoring works in general.
What Are Factoring Companies?
Factoring companies are usually financial institutions that offer you a factoring service. Working of factoring companies involves the company or the client of the factoring company, the factoring company itself and the customer of the client. A factoring company works on availing funds to its clients through the following steps.
- Online application
- Credit verification
- Transfer of credits based on invoices
- Collection of invoices from the customer
- Repayment of the rest of the amount to the client minus finance fee
A factoring company can help you grow your business or company by providing steady cash flow based on your invoices. Therefore, a factoring company can be of great help to receive non-debt funding in times of financial need.
How Can I Get In Touch With A Factoring Company In Singapore?
Most of the invoice factoring companies in Singapore have a presence online, with their websites and an online application portal. You can get in touch with a factoring company in Singapore through their live chat, contact page, or through emails whichever is available on their website. Most of the invoice factoring companies in Singapore also provide customer support phone number on their website. You can contact through these numbers to get assisted with the services.
How Can You Start With A Factoring Company In Singapore?
If you are planning on taking services from a factoring company in Singapore, you can start with creating your account through the company website or the application portal. The application process for invoice factoring is completely online.
The application process involves you connecting the necessary financial records to your account on the factoring company site. The factoring company then goes through these applications manually assessing the credibility parameters. On approval of your application, the factoring company immediately proceeds to credit you with the funds and initiates the next procedures.
How Does A Factoring Company Work In Singapore?
Factoring companies in Singapore work towards providing quick funds to their clients based on their receivables accounts. The integration of online financial records makes the application and assessment of credits easy and faster. As discussed in the earlier sections, the steps involved in factoring can be consolidated into the following:
- Credit distribution
- Settling the invoices
Most of the factoring companies take applications online and this process is followed by you providing the necessary documents. Your application will be reviewed and verified by the cash flow experts from the factoring company.
The application procedure is followed by the factoring company extending an advance payment to the applicant. The rest of the amount (minus a fee) is distributed after the customer pays the invoices to the factoring company.
Factoring comes with added benefits of managing your customer payment details. A lasting relationship with a factoring company can benefit you with providing credit check on new clients, financial reports and management of your customer payments. This, in turn, helps in organizing a repayment schedule from your customers.
When Should I Approach A Factoring Company?
Factoring companies can be of great help when your business or company is facing a cash flow crunch. Situations where you lack the working capital in order to meet the needs of a bigger offer but your customer is not able to pay immediately. Or you falling short of ready funds to expand your company or to scale up your business. This is where you need an immediate solution to your financial situation.
Traditional bank loans come with a few disadvantages such as the following:
- Strict requirements on documentation
- Paper works for the application process
- Added interest rates on the funds received
- Lengthy and tiresome process, etc…
In Singapore, such situations can be handled effectively by approaching a factoring company. A factoring company can provide you quick funding based on your existing accounts receivables with other benefits to grow your business.
Can A Factoring Company Help My Business Grow?
Yes, factoring brings you a steady and maintained cash flow to keep up with the market. Invoice factoring can help meet your goals eliminating the downtime. At the same time, it is a time saver because you don’t have to be involved in the follow-up process of the payment from the customer.
The follow-up process involves keeping track of all the paperwork related to payment details and administrative work. Having a factor managing this, you can benefit from a significant amount of time to accommodate larger projects without the constraints of working capital.
You are effectively out of collecting end of payment from the customer.
We Are An Award-Winning Factoring Company In Singapore.
We are a factoring company in Singapore which provides invoice factoring and line of credit services to small and medium enterprises. We have been named the best factoring company in Singapore by Visa. We follow a paperless, online application process.
Our application process is simple, you can start your account by signing up here. The next step is to connect your online accounting software like QuickBooks, Stripe, or Lazada to verify the invoices submitted by you. There will be a manual check on invoices by our cash flow expert team to assess the credits.
Once your application is approved, we will credit your account with 80% of the invoice amount. You can make use of this account to meet your needs of the company or business. From there on we will keep up with your customers’ invoice payments. We will collect the invoice payments directly from your customer on the scheduled time.
Once we receive the invoice amount from your customer, we will credit you with the rest of the 20 % of the invoice amount. At this stage, we will reduce a small finance fee for our services.
If you are looking for a financing solution for your business, you can get started right here.