Have you ever considered invoice factoring in the moments you have required fast and secure funding? Invoice factoring is a type of financing that converts outstanding invoices due within a given amount of days into immediate cash for your small business, reducing payment periods and improving your reaction capacity. Check out how this service works and why it is the best option for your company.
Once you have provided products or services to your B2B or B2G customer, you issue an invoice with payment terms, which will delay their payments and hinder your cash flow. With these invoices, you can qualify for a factoring program with Summar that will accelerate their payouts.
Summar will give you an initial advance for up to 90%, called an advance rate. The amount of your advance depends on the size of your transaction, your industry, and other risk parameters.
We issue a Notice of Assignment to notify your client that Summar will receive the pending payment. All payments will go to a lockbox account (a designated account for the factored invoices to be paid), set up by us.
We will be a partner in your collection process, following your history of techniques. When your client makes the payment according to the invoice terms, it will go directly to Summar.
After receiving payment from your client, Summar will give you the remaining balance of the invoice, called the reserve amount, minus its fee.
Invoice factoring is right for capital-intensive businesses needing consistent cash flow. If you choose invoice factoring, you'll bring a partner into your business to support your risk evaluations, accounts receivable management, and collections process. Keep reading to check out some pros and details you must consider!
Qualifying for invoice factoring is easier than qualifying for long-term financing. Credit scores, annual revenues, and profitability can be significant hurdles in other financing options, but in invoice factoring, the relevant credit score is your client's. Consequently, you can apply if your customers meet their payments on time. If you meet these requirements and your company does not have any current legal or tax problems, you are the perfect candidate for our services!
The base cost of an invoice factor depends mainly on two aspects:
Learn more: Factoring: A Way of Minimizing Risk From Your Investments
One of the most important concepts to understand when considering invoice factoring is recourse factoring vs. non-recourse factoring.
Recourse factoring means that the factor has the right to collect payment from you if your customer doesn't pay the invoice within a reasonable time after its due date.
Non-recourse factoring is when the factor accepts the risk that the customer won't pay. In this case, even if your customer doesn't pay the invoice on time, your business won't be on the hook for it. At Summar, we offer non-recourse factoring.
When you decide to trust Summar, you count on a new partner who worries about your finances' health just like you. You'll obtain an added value that will surely help you level up.
At Summar, we have turned our +16 years of experience in factoring into products that allow us to put ourselves in our clients' position and offer real, practical, and safe solutions that benefit their cash flow without any hassle. Understanding your purpose makes us know the best way to boost your growth from your finances' management.
Through an unbeatable credit guarantee, we can assure you that your money will always be safe. Our truly non-recourse program will be the perfect solution to protect you against unfamiliar situations. Also, with benefits such as the direct support of an account executive who will understand how and when you require your payments and the support of more than 1,000,000 funded invoices, we can confirm that our solution is like no other.
Easy and fast funding makes invoice factoring with Summar a pivotal option to enable your company's growth. If you have clients with a high credit score and need to improve your cash flow without affecting your company's creditworthiness, there is no better option. Contact us and discover more!