In 2016, Funding Societies launched their second product, Invoice Financing. For those who are not familiar with the concept, here’s a quick introduction.
What is Invoice Financing?
Invoice financing is a product where business owners sell the future receivables or invoices they issued to their customers to get immediate cash.
Say there is a business owner and a buyer. Your customer purchased goods or services from you, the business owner, and was issued an invoice with a credit term of 60 days. This means the business owner will only receive payment after 60 days, at the earliest; but what if you need cash right away? This is where invoice financing comes in. Business owners can sell their invoices at a discount, in exchange for immediate cash, thus enhancing cash flow.
Utilised wisely, invoice financing can be a useful tool for business owners to fund business growth, even if their short-term assets are tied up in accounts receivable.
The process of getting upfront cash through invoice financing is significantly quicker than applying for a loan from a traditional financial institution, and unlike a business term loan, you are not taking on any additional debts. You are simply freeing up money owed to you, for the service you have already delivered to your clients.
Recently, Funding Societies announced the launch of Invoice Financing V2.0, an upgrade to their existing product, to provide SMEs with more flexibility and support in improving their cash flow.
With Invoice Financing V2.0, SMEs can expect:
- Cash upfront for their invoices
- Up to 80% of invoice value
- No collateral required
- Quantum up to SGD 1 million
- Pro-rated interest on a daily basis
To help you better visualise the improvements they made, here’s a deep dive into Invoice Financing V2.0’s fresh new features:
1. Pro-rated interest on a daily basis
For regular invoice financing, interest rates are fixed to the invoice amount and loan tenor, and will not differ even if you or your clients repay early. Funding Societies’ Invoice Financing V2.0, on the other hand, pro-rates interest on a daily basis, providing SMEs with savings for early repayment. For example, if your clients were to repay a 100-day Invoice Financing in 90 days, only a 90-day interest will be charged, saving you a total of 10 days of interest!
2. Flexible Loan Tenors
For most Invoice Financing products, your loan tenor is fully dependent on your invoice terms, regardless of early or late repayments. In reality, however, companies often struggle with late invoice payments from debtors. With Invoice Financing V2.0, Funding Societies takes into account the client’s receivables aging history and offers up to 120 days tenor to provide SMEs greater flexibility and cash flow assurance through their invoices.
Funding Societies is dedicated to improving our products to better serve your financing needs. Invoice Financing V2.0 was crafted to help business owners like yourself have greater confidence in your business’ cash flow and provide SMEs with a quick turnaround option to fund operations and capture opportunities.
Funding Societies now takes into account invoices’ aging history for the approved loan tenor and also provides more ﬂexibility for early repayment that would incur zero interest for the remaining invoice days.
Never miss out on another opportunity with Invoice Financing V2.0! For more information, you can live chat with Funding Societies today to find out more!