Best Platform for Invoice Financing

Traditionally, SMEs have been required to establish a reputable operating history and creditworthiness over a long period of time before applying for an invoice financing facility, making it difficult for any smaller/younger businesses. Furthermore, banks have recently tightened lending criteria for businesses. As a result, SMEs are trapped, unable to obtain sufficient funding to grow their businesses. This, combined with long credit terms (up to 30, 60, or 90 days), further hinders businesses.

With the rise of alternative finance, businesses can now access finance facilities outside of traditional banks, providing alternative funding solutions.

Invoice financing is a type of financial product that provides a working capital solution. Invoice financing provides the company with the necessary cash flow to fuel its day-to-day operations and to smooth cash flow.

How Does It Work?

When compared to banks, invoice financing platforms enable faster and more efficient financing. SMEs can now easily obtain cash from their own invoices using invoice financing, without the risk of increasing debts. This is unquestionably a better solution for assisting SMEs with their financial growth and providing better alternatives to working capital financing.

On these invoice financing platforms, businesses can obtain working capital by selling off outstanding invoices or accounts receivable.

Advantages / Features over Traditional Banks

Streamlined application process – With the market’s alternative players, these providers typically offer a more flexible onboarding process and criteria, making it easier for SMEs. Traditional banks typically have stricter requirements and require a large amount of paperwork, making the application process complex and time-consuming.

No contract lock-ins, and you can withdraw funds whenever you want. Traditional banking loan facilities are fixed in comparison to banks, and fund revisions can take months.

Faster – Unlike traditional banks, which can take weeks to process invoices, the time between posting an invoice and receiving funds is measured in days, not weeks. Within 4 hours, you can withdraw funds from InvoiceInterchange against outstanding invoices.

Transparent – There are no hidden costs on invoice financing platforms, and all costs are disclosed upfront. Banks, on the other hand, charge additional set-up and processing fees, as well as due diligence fees, credit check fees, and processing fees, among other things.

How Online Invoice Financing Solutions Help Small Businesses

When an SME registers with an invoice financing platform, it can post invoices that will be advanced with cash. Typically, the amount advanced is between 70% and 90% of the invoice. The investors can earn capital returns from outstanding invoices and return the balance to the SME based on the agreed fees disputer. SMEs can improve their cash flow and stay in business by utilizing online invoice financing solutions.

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