Finance Invoice (IF) is not considered a credible financial source among several business owners because the price is relatively high and its neighbor. Is this perception justified? I would think it was not with the introduction of a single financial invoice.
What is the Finance Invoice?
This is the sale of large sales books for cash that provides ongoing cash sources as an invoice issued to customers by the company. The company can maintain this cash collection or transfer and relevant credit risk, to the funders.
Some conventional facilities can force many types of costs and costs, and require security and commitment from the company to sell all the largest sales books to financing companies.
Some companies offer refreshing financial alternatives, offering to buy only one invoice and charge as little fees as possible one and generally offer more flexible alternative funds.
What is a single financial invoice financial?
As the name suggests, it is a purchase of an invoice for cash from the company. The company does not need to sell further invoices so that the finances of a single invoice can be used by the company to raise cash because they need it. Also, they may not need to provide security such as debt or personal guarantee.
Single or multiple if the tool is effective for cash management because they liquidate non-liquid assets., They change the debtor into cash. The realized cash can be reinvested by companies in profitable projects or used to repay expensive debts.
Some borrowers might argue that with an annual basis, high invoice financial costs compared to conventional loans. Comparison is like comparing apples with oranges because the two financing instruments work differently. Loans are a sustainable financial source while the finance of a single discrete invoice – provides financial up to 90 days or less. Annual Workshelt Invoice Finance Fee is not consistent with its use.
Although interest rates on loans may look relatively interesting, the cost of managing and managing it must also be calculated in, such as settings, commitments, non-utilization, and output costs, plus service fees and documentation costs. Maybe there is also a fee for pursuing and restoring bad debt, or paying credit protection. Finance Invoice has its own settings and administrative costs that may be more or less than bank loans.
Therefore financial invoices are a credible alternative for loans because of:
This changes the company’s debtor into cash which can then be invested in potential to produce a positive return for the company.
Companies can transfer the risk of debtor credit.
it avoids the use of limited bank credit capacity for a company and
It diversifies the company’s funding sources so as to reduce its dependence on the banking sector.
The company can use it to raise cash as needed
Security may not be needed
