- October 5, 2020
- Posted by: avantconsulting
- Category: Uncategorized
Every business would require capital and no harm securing more. Many companies will look for funding options to acquire more capital at some point in time. Read the article – Alternative ways to acquire funding (link to previous blog post) to find out more about the options available for your business.
Following the alternative ways to acquire capital, we have also compiled a list of companies that would allow you to tap into the popular funding alternatives – invoice factoring and Peer-to-Peer (P2P) lending.
Invoice factoring is the idea of financing that allows businesses to sell their unpaid invoices (accounts receivables) to another company. It aims to help businesses to ease capital problems and it is an increasingly popular alternative funding option. Most companies adopt invoice financing to speed up the process of acquiring capital and ease cash flows.
Invoice factoring is just as useful for small businesses and startups, as it is for the larger corporations. In fact, it is commonly adopted for small businesses or starts-ups when they have a less favorable borrowing position. As it may be difficult for them to obtain financing aid, they would turn to invoice factoring. This is because ultimately, factoring companies are more vested in the credibility of the customers instead of the company itself. The shift in credibility hence allows businesses to gain access to capital.
So, what are some of the companies in Singapore that do invoice factoring?
This is a product by IFS Capital Limited (a regional financial institution listed on the SGX since 1987). Multiply simplifies the process of invoice factoring with no termination fees, no monthly minimum fees, no maintenance fees and no due diligence fees. Therefore, you do not have to worry about any recurring hidden costs borne by you.
Bibbly Financial Services
They are experienced in working across industries such as marine and offshore financing, construction, manufacturing, manpower, logistics, and transport, wholesale, and start-ups. Hence, if you are operating in these industries, you can consider engaging their services.
Finaxar offers online factoring services. This reduces the hassle on your end since the processes are done online. Hence, you enjoy the additional benefit of convenience.
Then what is the difference between invoice factoring and discounting?
Similarly, invoice discounting is selling unpaid invoices to a lender and they will give you cash in advance and that amount is usually a percentage of the invoices’ value. The key difference lies in who takes charge of your account’s ledger. For invoice factoring, the finance company will take charge of your sales and debts but for invoice discounting, your business will retain control over your sales ledger.
It is an online financing company that allows Small Medium Enterprises (SMEs) to gain access to capital tied up in invoices or contracts. It offers 2 products namely – Invoice Pay and Purchase Pay. Invoice Pay serves to assist businesses that require instant capital access to their account receivables. Meanwhile, Purchase Pay is meant for businesses that require capital to pay for their purchases and make repayment subsequently.
Overall, you see how both invoice factoring and discounting can ease your cash flows, allowing you to tap into tied-up capital. It is exceptionally useful when for businesses that are heavy on receivables and engage in regular inventory purchases.
Peer-to-Peer (P2P) Lending
Besides invoice factoring/discounting, another popular option would be P2P lending. You will usually turn to this option when you require a larger sum of cash because ultimately, there is just so much your invoices can help you in acquiring capital. Also, if you have a poor credit score that reduces your chances of securing a loan with banks, this is highly your go-to option.
Some of the P2P lending companies in Singapore include the following (the list is non-exhaustive):
Launched in 2015, it is one of Southeast Asia’s largest P2P lending platforms, they specialize in short-term financing for SMEs, crowdfunded by individuals and investors. They offer 3 main products as follow:
Founded in 2015, Validus helps SMEs to secure short term and medium-term financing. Today, they operate across 4 countries in the ASEAN region. You can find out more about their product offering below:
At Minterest, you can obtain borrowing for corporate purposes through their Corporate Loan or Invoice financing. Alternatively, you can look to take up a personal loan as well. They provide flexible terms so you can choose your repayment tenor for up to 12 months to cater to your business needs.
Furthermore, when it comes to financing, you definitely would want to compare the various products offered by different companies. It is a very tedious process and often time-consuming. Hence, you can turn to these platforms for a quick comparison of products.
All you need is to key in what you want to compare, and they will generate results of comparison. It saves you so much time with their deep pool of data, cutting the hassle of scurrying through different tabs to locate information. On their website, you can have a bird’s eye view at a glance and easily draw comparisons.
Similarly, Go Bear is a comparison portal as well. On their website, you can draw quick comparisons for financial products such as credit cards, personal loans, insurance and banking products such as robo advisors.
Ultimately, there are various platforms to help you fund your business capital needs. However, nothing beats a quick consultation. A physical enquiry is always faster than you trying to navigate through various websites. Feel free to speak to us about your financial concerns and our advisors will assist you shortly!