Invoice Financing

Here’s an affordable, cashflow-friendly answer to increasing working capital – If your company offers payment terms of more than 30 days to clients, you can monetize your accounts receivable (AR)/ unpaid invoice(s) & get up to $500k.

Call: +65 8336 3133

or

Email:Contact@Frcapital.sg

Why you will love this

  • Finance your purchases on an open account basis
  • Free up your funds for other business purposes
  • Reduce the hassle through direct funds remittance to supplier

Features and Benefits

How It Works

Invoice Financing Fee Calculator

Questioning about the invoice financing interest rates? Use our free calculator to estimate your fees & get in touch for a customized quote for your company when you’re ready.

Adjust the sliders to see how much you can get upfront & your expected cost

The calculator figures are intended only as a guide, based on the information that you provide. This shall not, and is not intended to, constitute a commitment that rates offered to you will undoubtedly be better than those generated by the calculator and, in particular, is not a commitment to provide any financing. Rates will be determined according to, among other things, our analysis of your risk profile. Any funding is subject to such terms and conditions, disclaimers, and lending criteria set by Validus Capital from time to time.

How much you could get now

$

Plus, when invoices paid

$

What you will pay

$

What is Invoice Financing?

Don’t wait months to get paid

Increase your cash flow instantly using your Accounts Receivable or unpaid invoices so that you can fund operational expenses & overhead or expansion.

  • Zero (0) collateral required
  • Easy to apply, 48-hour approval
  • Up to $500,000, next-day cash
  • Flexible terms – take the invoice you want to finance

Benefits of invoice financing

Unlock capital trapped in unpaid invoices.

Funds to capitalise on new business opportunities.

Flexibility to finance invoices as and when you need.

Short-term capital injection or as a top-up to bank financing.

Why Choose FR Capital?

Loan approval outcome in 48 hours.

Attractive interest rates from 1%/month.

Transparent, simple fees.

Over $550 million funded.

Join hundreds of SMEs just like yours who entrusted us to help grow their business

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Get started today with a simple application and quick approval

Invoice Financing

up to 80%

of invoice amount

  • Up to $500,000
  • Interest rate from 1% per month
  • Tenure 30 to 120 days, depending on invoice terms

Borrow up to $250,000 or up to 60% of PO amount. Minimal docs needed to apply.

Facture financing is a financial method for financing a third party or financial institution for your accounts receivables. Invoice financing has two standard practices. You are factoring invoices and discounting invoices. Both cases sell the invoices to an enterprise or a third party, commonly referred to as the “factor.”

The company credits the company with a pre-payment of 70%-90% of your invoice amount in Invoice Factoring. The factoring company then pays your customers directly. If the customer pays off the invoices, you will be delivered the rest of the 30-10% pending the invoiced amount minus a factoring fee.

The factoring company credit in Invoice Discounting with a more significant percentage of the amount invoiced, but the owner manages the collection. When the customer deletes the factures, the remaining portion of the amount invoiced minus the factoring charges is paid by the factoring company.

The term “invoice factoring” is used interchangeably with “invoice funding,” because invoice factoring is the most common methodology.

The financing of invoices allows firms to borrow based on their customers’ invoices. This offers small and medium-sized enterprises a great option in the short term for finance at low-interest rates over other forms.

The apparent benefit of invoice finance is that companies can handle their cash flow by paying the central part of the Invoice within 48 hours, instead of waiting for 30+ days.

A further significant advantage is that invoice finance offers companies a way to finance their growth, like a business loan and using assets they already have without taking extra liabilities or debt. Check our Financial vs. Corporate Loans page here.

It is essential to look at the various types of financing for invoices for your company. For example, you may have to use the invoice finance provider to finance your entire leaflet but only a few invoices or clients. Or maybe you want to do the whole booklet and get more money.

Credit control is also an issue. Some financial providers insist that they manage their credit controls which may damage your customer relationships.

As already stated, these things are specific to invoice financing so that you know which one you want and what each one offers.

Facture financing enables companies to acquire loans according to the value of their customers’ payments. In general, lenders provide funding to 70% to 90% of the total company invoices. This usually is available for short periods, between 15 days and 1 year. The borrower has already provided the lending companies to customers and has reasonable repayment expectations compared to another short-term financing. Consequently, interest rates are generally below other short-term loans.

Compared to bank terms, the crowdfunding platforms are more thoroughly illustrated. That said, banks tend to offer funding with lower interest rates than multi-funding platforms and are usually more selective.

A financial institution can finance your invoices. You will be asked to integrate your online accounting software with the account once you create your account with the financial institution. The invoices submitted by the finance authorities are verified, and the invoices which can be re-traded are approved.

The financing company pays you 70-90% of the approved invoice in advance. The recovery process occurs when the time comes, depending on the financing service (factoring or discounting). The financial institution shall pay you the remainder of 30-10% less the service charge once the customer pays the invoices.

You keep going as usual and charge your customers.

You then forward the details of the account to the agreed provider of invoice financing.

The provider pays you an agreed percentage, often in just 48 hours (this varies by company).

You can pursue the payment, as usual, depending on the agreement, if necessary, or the supplier will do so for you.

After you pay the invoice less any agreed service fees, you will receive the remaining amount.

Invoice factoring is a flexible way for your company to get funding quickly. The typical fees involved, also known as the discount rate, are deficient. Every month, an industry average varies between 1.5 and 5% of the total value of factored invoices.

For example, here’s an illustration to help put things into perspective. Fees will typically range from S$300 to $1000 if you factor in S$20,000 in invoices.

Of course, the longer you’ve been working with an invoice factoring company, the better deals they’ll be able to offer you for being a reliable business partner.

Watch Out for Hidden Fees

Invoice factoring companies may charge a variety of additional fees. These can be used in place of or in addition to the discount rate. Most factoring companies will list these fees in the paperwork you sign when you start working with them. Factoring companies want you to be aware of their services so that they can be pretty reasonable.

Here’s a list of other fees that a factoring company might charge. Always feel free to inquire about each one and whether or not it is being used. You don’t want to overlook any potential extra costs.

Factoring Fees Explained

Application Fee

This is the fee that aids in the start of the process. It’s worth noting that this fee isn’t always included in contracts. It’s relatively uncommon in industries where invoice factoring is used frequently and reliably.

However, it is expected in situations where they must manage the application process somehow, and the fees are very reasonable. If the payment exists, you may be able to waive it entirely for some companies – particularly those with a long history of factoring invoices.

Factor Fee

For each invoice processed, the factoring fee is a fee. Typically, it will be a little low but may have a difference in business. Any company that works with large invoices may be unconscious because it requires fewer invoices to factor in a certain amount. Again, such large invoices could be used by a company to find a substantial immediate cash inflow. In any case, because such charges are typically fixed, the higher the invoices, the lower your factor charge.

For a company working with a variety of smaller invoices, a factoring fee may be more difficult. This factor fee will be counted and added to a relatively higher amount.

As such, a fee has a different effect on companies, do the mapping and find out how this can affect your company before you sign a deal.

Credit Check Fees

Historical research is carried out in your enterprise to ensure a factoring company takes an appropriate risk. A check on your credit may involve a fee.

In the same way, the back gathering can trigger a check fee if there are questions about the lending of some of your clients. This helps factoring companies to protect themselves from companies that may want to remove someone they believe is an unreliable customer.

For example, consider an organization that knows that a customer has become insolvent and defaulted on what he owes recently. You do not expect several invoices from that customer to be paid, so you go to a company that manufactures that customer’s invoices. The factoring company pays the advance rate, which maybe 80% of the total invoice value. However, the factoring company cannot collect them.

That’s why your customers have reasonable credit checks. Had the factoring firm gently searched a customer, they would not have entered into a deal to jeopardize them.

Mailing Fees

 As a Notification or Non-Notification firm, a factoring company may function. Notification means that they will communicate with customers whose invoices are considered to be their own. Non-notification means that they will enable your business to communicate with its customers, or they will act as part of your business.

If any of the choices a factoring company needs to communicate with its clients are chosen, they will often send mail. Mailing charges are constantly rolling into the cost of doing business, where the initial reduction charge is taken into account by a factoring company, but sometimes separately. When the invoices are worked with over a more extended period of time, there are good reasons to keep them separate, where more communication is necessary.

Several other possible fees may apply to different manufacturers. In short, how everyone does business or breaks costs may be slightly different from the next. Ensure that payments for the agreements you want to sign are reasonable and that you are good at going. Don’t worry about asking if you’re unsure if they’re being charged by your factoring company or not.

Invoice finance can be beneficial to large and small businesses, but before deciding whether it is right for you, some things to remember. First, although the financial provision of invoices is intended to combat the cash flow problem, it is not a substitution of income. While loans and overdrafts can give you cash injections in cases where your business is slow, your company successfully gains sales and raises invoices based on invoice finance.

The invoice financing also has a cost. This is usually in two parts. This is a monthly fee usually based on your turnover and then the interest fee per invoice.

As mentioned before, the main advantage of invoice factoring is that you receive the money your business is due without waiting for customers to reimburse you. Below are other particular benefits with invoice financing:

Immediate Cash Flow:

It may take months to approve applications for commercial loans or other financing options. It can then take extra time to receive the funding for which you are approved. By way of comparison, factoring invoices gives you quick access to cash so that your business can keep going smoothly. If you have short-stay funding needs, this is a particularly viable option and can’t wait weeks or months for approval or wait until your customers repay you.

Ongoing Cash Flow:

Factors need not be a one-time financing option. If it makes sense for your business, it can build up a relationship with your factoring company. Keeping the cash flow will not be a problem because you won’t have to wait for invoices to be paid before your bank account receives money every month.

Better Chance of Getting Approved: 

Collateral, credit, and loan history are not essential factors when determining your invoice factoring ability. In general, the factoring company is most interested in assessing your customers’ payment history. This provides you with a great idea of what the risk is. So, invoice factoring might be a feasible option if your credit value is low or you have other harmful aspects to your financial history.

Ability to Outsource This Task:

Let’s face it – it takes time to keep track of outstanding invoices and contact customers. As a consequence, it will take you a significant task to give these tasks to another company. During the working day, you will have more time to handle other tasks while the company provides payment arrangements and contacts customers.

No Collateral Required:

The invoices are collateral so that you will need not worry about the provision of property, equipment, or other expensive forms of collateral.

Improved Customer Relationships:

As a business owner, some of your responsibilities can be frustrating and difficult. One of these tasks is collecting a debt. When you hand this responsibility over to a factoring company when gathering money, you must not look like the bad guy. This can help to maintain strong and positive customer relations. It will hopefully allow you to establish longer-term customer relationships as well!

The discount offers you much quicker access to the cash in your accounts payable – unpaid customer accounts. You receive a short-term loan from an invoice discounting company instead of waiting for your customers to pay your invoices.

These companies will lend you up to 95% of the value of the invoices and pay you the money in days instead of weeks. You will reimburse the loan once you receive payment from your customers.

Facture discounting is the practice of using an unpaid account receivable for a loan issued by a financial company as collateral.

This is a brief-term bond because the financial company can change debt payments when calculating collaterally receivable changes. This is a concise term form of borrowing. The debt issued by the financing firm is less than the total debt receivables outstanding (typically 80% of all invoices less than 90 days old). The financing company is not generally more selective than to allow a percentage of all outstanding invoices, which means that many customers can rely on the distribution of claims to prevent collateral loss.

Invoicing discounts mainly accelerate customer cash flow. You get the cash almost as soon as you issue the invoice rather than waiting for customers to pay by their normal credit conditions.

To keep the arrangement, the financing company earns money both by the loan interest rate it charges (which is well above the prime level). The amount of interest credited to the borrower is based on how much money is borne rather than how much money can be borrowed.

It is impossible to discount the invoice if a loan has a full title for all company assets on another loan. In these situations, the other lender must waive its right to receivables and take a junior position behind the financial enterprise.

The borrower transmits the receivable report to the financial enterprise from an operational point of view at least once a month, adding debts into the categories requested by the financial firm. The finance company uses this notice to adjust the debt that the borrower is willing to lend. The borrower maintains control over the accounts receivable and is responsible for extending, billing, and collecting the credit to the customers. No discounting arrangement needs to be notified to customers.

The method of invoice financing is discounting. It is different from invoicing, which is confidentiality, in several ways. Your customers never know that they use discount providers for invoices, whereas factoring in invoices is usually more challenging to conceal.

The great advantage of discounting the invoice is that you know you’re paid fast. This has a significant impact on your cash flow, particularly when customers usually need a long time to pay. The more your cash flow will survive and thrive, the more critical it is for the well-being of your firm to increase its cash flow.

Another advantage is that invoice discount financing is usually cheaper and more accessible than requesting a bank loan – and that it is likely that you are approved. It would assist if you also had a more predictable revenue stream with a discounting invoice service. This makes planning and forecasting business more accessible, which can enable you to profit from new investments.

You may spend the money you receive through invoice discounts in every way:

  • Taking temporary staff over a time of the season.
  • I am buying more stock or raw material.
  • She is taking you through a challenging trading period.
  • They are investing in the future.

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About FR Capital

FR Capital is a Singapore consultancy firm that helps SMEs to secure business loans from banks and financial institutions. We concentrate on SME finance, and through our expertise and network, we help clients secure funding with low-interest rates efficiently and hassle-free.