How Does Invoice Factoring Work?

By Per Frennbro in Fast Financing

You may have already heard about invoice factoring, as it is not a completely new concept. However, it is in the recent years that much of its popularity has grown. As a small business owner, you may come across financial institutions such as banks that are less convenient as well as less responsive in these times. You will require paying high interest rates along will filling a lot of paperwork. These financial organizations have tightened their terms and conditions, making it a lot difficult for you to receive finance for your invoice in a timely manner. In case your credit history does not meet the criteria of the bank, then there is a high chance of rejection of your loan request.

With invoice factoring, you can have access to quick cash for your business. You can regard invoice factoring as one of the easiest and the most affordable ways in which you can unlock the money that is presently tied up in your debtors’ books.

You may have customers who pay your invoices in 30, 60 or 90 days. This is where the problem occurs, as you can’t afford to wait for such a long time in order to get the payment. You need money to cover your own business expenses and you need that money a lot sooner. So what would you do? You can take help of a factoring company that can pay you upfront for your outstanding invoices. Here at BETALD, we provide a platform where businesses meet financiers.

How does invoice factoring work?

Here are the steps –

  • As the owner of a business, you send an invoice to your customer.
  • You upload the invoices on our BETALD platform. If you don’t want to factor all your invoices, you have the freedom to choose.
  • Your invoice is up for bid now. Investors place bids against your invoices.
  • You select the bid that you think is the most suitable for your business.
  • You get up to 99% of the invoice value in your account within one hour of the closing of the auction.
  • You get the remaining 1% minus the factoring fee once your customers pay the factor.

Compared to getting a bank loan, factoring is a lot more complicated. In order to fulfil all your immediate cash flow needs, you can get money advanced from your customer invoices that are unpaid from the factoring company almost immediately. If your clients pay in a timely manner, invoice factoring is the most convenient option you can opt for in order to strengthen your work flow capital.

BETALD offers affordable, fast and reliable invoice financing from as little as €/£100. We make waiting for invoices a thing of the past. You can sign up with us at completely free of cost. All you have to do is sync your online accounting system with us and choose the invoices that you want to clear. Once the auction closes, you get the fund in your bank account within an hour. Use our invoice factoring platform and enjoy the benefits!

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