How Invoice financing company Singapore helps businesses?

Invoice finance Singapore is an exceptional way of obtaining a working capital loan. It is also one of the finest ways to streamline your finances as well as make sure a healthy working capital fund.

What is invoice financing?

Invoice financing offered by Invoice financing company Singapore is an asset-based lending product which lets your company to get finance in lieu of slow-paying accounts receivable. There are two methods of raising working capital funds through invoice financing. Either a corporation can sell its invoices in exchange for an instant payment or it can make safe a credit line based utilizing the invoices as an asset.

Invoice Financing Company Singapore

Now, the question that arises is,

Which kind of invoice financing is paramount for small as well as medium enterprises?

Well, since SMEs deal at a much smaller scale than multi-nationals as well as large companies, their extent for getting a large loan through invoices is quite inadequate. However, they can raise instant capital through sale of their invoices to a non-banking financing company like Multiply.

A marketplace lender like Multiply will finance up to hundred percent of an SME’s slow-moving accounts receivable, given that the third party involved is creditworthy. Normally, the invoice financing is done in two parts wherein the lender offers up to eight percent of invoice value within one business day as well as the remaining twenty percent, minus the processing fee, when the third party pays the invoice in full.

Another similar route followed by NBFCs offering invoice financing is where the invoice amount is transformed into a business loan, partly or in full. The loan amount is billed on the invoice due date, making it a very short-term, and small-ticket business credit.

If you noticed, invoice financing not only involves a business getting loan on their accounts receivable but also incorporates a deduction in form of processing fee as well as interest. What then can a corporation gain by sacrificing a part of its accounts receivable?