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Debtsify

Invoice Factoring

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High interest rates

Negotiable Interest rate

Strict qualification

Easy Qualification

Limited loan amount

Unlimited Amount

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Preserve Equity:

Maintain ownership stake in your business without dilution.

Scale faster:

Increase the size or volume of your business rapidly and efficiently.

No upfront costs:

Start or expand your business without having to pay fees or expenses in advance.

Guaranteed growth: 

Ensure steady and sustainable expansion of your business.

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India’s Fastest & Simplest Debt Provider

Understanding Invoice Factoring

Invoice factoring is a financial transaction where you sell your outstanding accounts receivable (invoices) to a third-party company (called a factor) at a discount. The factor pays you a significant portion of the invoice value upfront (typically 70-90%), and then assumes the responsibility of collecting payment from your customer.

 

Here's a breakdown of the factoring process:

  • You provide goods or services to your customers on credit.

  • You issue invoices to your customers for the agreed-upon payment terms.

  • You sell your invoices to a factoring company.

  • The factor pays you a percentage of the invoice value upfront (minus a factoring fee).

  • The factor collects payment from your customer.

  • Once the customer pays, the factor may remit the remaining invoice amount to you, minus any additional fees.

Benefits of Invoice Factoring for Businesses
 

  • Improved Cash Flow: Gain immediate access to capital tied up in outstanding invoices, boosting your financial flexibility.

  • Enhanced Business Growth: Invest in strategic initiatives like marketing, inventory, or expansion plans without waiting for customer payments.

  • Reduced Risk of Bad Debt: Mitigate the risk of non-payment by customers, as the factor assumes collection responsibility.

  • Simplified Accounts Receivable Management: Free up your resources by outsourcing invoice collection to the factor.

  • Improved Customer Relationships: Offer extended payment terms to your customers without impacting your cash flow.

Is Invoice Factoring Right for Your Business?

  • Factoring can be a valuable tool for various businesses, including:

  • B2B companies with slow-paying customers

  • Businesses experiencing rapid growth

  • Companies in seasonal industries with fluctuating cash flow

  • Startups requiring working capital to fuel initial operations

Considering Invoice Factoring? 
 

Contact Debtsify today for a free consultation with our financial experts. We'll assess your specific needs and determine if factoring is the right fit for your business. Additionally, we can explore alternative financing solutions like unsecured loans offered by Debtsify, which can provide a faster and simpler application process.

Frequently Asked Questions (FAQs) on Invoice Factoring
 

  • What types of invoices can be factored?

   -   Most B2B invoices are eligible, but consult the factor 

        for specifics

 

  • How much of the invoice value will I receive upfront?

   -   Typically 70-90%, but it can vary based on the factor

        and invoice risk

​

  • What are the fees associated with factoring?

   -   Factoring fees typically include a discount rate and

        potential service charges

​

  • How long does the factoring process take?

   -   Relatively quick; you can receive your advance within

        a few days

​

  • Do I have to factor all my invoices?

   -   No, you can choose which invoices to sell based on

        your needs

​

  • Does Debtsify offer Invoice Factoring services?

   -   Currently, we specialize in unsecured loans for

        premium brands

​

  • Can Debtsify help me understand if Invoice Factoring is suitable for my business?

   -   Absolutely, our consultation can explore various

        financing options

​

  • How does Debtsify's unsecured loan application process compare to Invoice Factoring?

   -   Our unsecured loan process is streamlined and

       requires minimal documentation

​

  • What are the interest rates for Debtsify's unsecured loans?

   -   Competitive rates based on your company's profile

​

  • Can Debtsify be a good alternative if Invoice Factoring doesn't suit my needs?

   -   Yes, our unsecured loans can provide a flexible

        solution for immediate cash flow needs

​

  • What happens if my customer disputes the invoice?

   -   The factor will typically handle the dispute resolution

        process

​

  • Can I choose which customers to factor invoices for?

   -   Yes, you can select specific invoices based on your

        risk tolerance

​

  • How will invoice factoring affect my financial statements?

   -   Consult with your accountant on how to record

        factoring transactions

​

  • What are the tax implications of invoice factoring?

   -   Factoring fees are typically tax-deductible; consult

        with a tax advisor 

​

  • What are some potential drawbacks of invoice factoring?

   -   Fees can add to your overall financing costs, and you

        relinquish some control over customer collections

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