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Knowing "some" of the benefits of Invoice Financing

By knowing more benefits of invoice financing, you’ll learn how it can access to working capital without going into more and more debt!

Invoice financing is a form of alternative financing that is available to SMEs, especially those that may not have an established record with lenders. Banks and alternative lenders often operate on a line-based financing model based on what your business has already generated and the assets you currently own.

Invoice financing is an innovative, and popular, way for your business to access the funds you have tied up in your accounts receivable.

Interest and fees are most likely lower than a normal unsecured business loan in Singapore.

Here are five major advantages of invoice financing:

1. Getting the cash even faster

Applying for business loans or alternative financing options can take weeks or months to get approved, especially if you do not have a relationship with the bank.

With invoicing financing, your business can get much quicker access to cash for your immediate financing needs.

2. Financial flexibility

If your business requires financial flexibility in terms of maintaining cash flow, then invoice financing would be your best option.

This way, invoices don’t have to be paid in full before there is money in the business account.

3. Higher chance of approval

When determining the chances of accessing business loans – aspects such as your credit score, collateral, and financing history are often considered with an unsecured working capital loan.

However, these are not required for invoice factoring approvals. The lender is more focused on the payment history of the customer required to pay the invoice. This is important to understand the level of risk that would be taken in invoice financing.

4. Invoice is your collateral

Usually, when an SME applies for a business loan, the bank or lender prefers the business to have upfront collateral such as equipment, vehicles, buildings, inventory, or even property.

However, with invoice financing, a business doesn’t have to worry about showing that traditional collateral. Invoice is also deemed as a set of collaterals in this case.

5. Improve customer relationships

The collection of payments with your clients can be one of those tasks that can be a headache. By having an invoice factoring company to manage the collections of your accounts receivable, you’ll be unburdened from this time-consuming and "pai-seh" task.

Along with renewed financial flexibility, you’ll be able to focus on the other aspects of your business — including building stronger relationships with your customers.

At Devise, we understand what it takes for businesses to succeed at any stage. We’re business people ourselves. Whenever you’re talking to Devise, you’re talking directly to your funding source and a fellow business partner.

Interested to find out more about getting your business financing, check out Devise Business, the fast-growing SME digital financing platform in Singapore.

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