Why you need an invoice factoring company?

Introduction

The number of SMEs and startups are on the rise in Singapore. With SMEs making a huge contribution to the economy, there are problems these businesses face when it comes to sustaining it. The studies show one of the major problems is with cash being tied up in the accounts receivable.

Invoice factoring has seen a boom in solving this issue in the Singapore business environment. More businesses from various sectors are opting for invoice factoring to fill their cash flow gaps.

Talking about factoring and other funding, why you need to consider them anyway? Here are some indications you need to look out for within your business.

  • Your Small enterprise is going to grow with time and you need funds to keep up with the demand. You have been starting to put off operational activities with a shortage of working capital. Most of the times, this working capital is stuck in your unpaid invoices.
  • Taking up large orders become challenging when there is a cash flow gap. Things don’t go as smooth as expected and it affects you from accepting those larger orders.
  • Expanding your company and business has to be compromised waiting for the receivables to be paid by your customers.

These are some hints that tell you when you need immediate funding to get over the cash flow gaps your company is facing.

Why are traditional bank loans failing?

The traditional bank loans are the first place businesses lookup for business funds. However, the rules and regulations from the banks most often turn businesses down especially SMEs. the main reasons businesses turn away from bank loans for immediate funding are:

  • Strict requirements on documentation
  • Paper works for the application process
  • Added interest rates on the funds received

The time duration for the application process typically ranges from 2 to 4 weeks. This largely depends on the documentation process. The terms and conditions for bank loans also differ from bank to bank. Most of them look for a considerable amount of time as an established business in Singapore, a minimum average daily bank balance and minimum annual revenue.

In addition to the above, the lack of collateral to submit also makes a huge barrier for SMEs to go for a traditional bank loan.

Why you need invoice factoring?

invoice factoring

Invoice factoring is preferred by many for a reason. It allows you to sell your unpaid invoices and get a comparable amount in hand quickly. Invoice factoring comes with the added benefits at the collection end too. Read more about the benefits of working with a factoring company.

While other financial methods take up a lot of time and resources just to process your application, invoice factoring gets it done with a faster pace.

Finaxar, has been in the leading front in Singapore for supporting SMEs and startups to attain their business goals. This is mainly done using two product line, invoice factoring and Finaxar credit line.

Invoice factoring through Finaxar works in a very simple and easy way. Your application needs to be submitted online. The process can be explained in simple steps

 

  • Sign up at the finaxar website
  • Integrate the accounting software
  • Let us assess and verify the documents
  • Approval

Once your application is approved, you will be credited with 80% of the invoice amount to your account within 24 hours. The whole process takes 3-4 days starting from the application to disbursement of cash. Another advantage is Finaxar doesn’t take a fee in any of these mentioned steps.

The collection process of your invoices will be done professionally by Finaxar. Once your customer pays off the invoice, you will be credited with the rest of the invoice amount and at this stage, a service fee will be deducted.

Invoice factoring will allow you not only to get immediate funds but will help save your time, Collection process one-time consuming task which takes up your time that can be used to focus on business growth. With another dedicated team of people doing this task, you can stop worrying about the hassles of collecting invoices and keeping up with that schedule.

Final note

Cash flow problems are one of the huge problems faced by businesses in Singapore. Traditional financial with their strict rules for documentation, terms, and conditions make the approval challenging for the businesses. Invoice factoring is the age-old practice that has recently started to gain momentum in the Singapore business world. Invoice factoring lets you sell your unpaid invoices and get funds immediately. In addition to that invoice factoring company takes care of the collection process making time for you to focus on growing your business.