The spread of the Coronavirus in the Netherlands is causing a very different economic situation than most entrepreneurs expected at the start of the year. Most sectors are severely affected by this annoying development and that sometimes puts companies in a difficult financial position. Fortunately, as is well known, there are government measures that can really help the companies. As an entrepreneur, you can also take measures yourself to get through the Corona crisis.
A standard response in the current situation is, for example, paying invoices later. This allows you to slightly 'postpone your expenses'. But what if your customers start doing the same? Then the income comes in later. When you depend on customers who pay invoices, and you need money quickly (or accelerated) then factoring can offer a solution.
Factoring, how does it work?
Factoring is selling your invoices to a factoring company. How does that work?
"Then you will immediately receive your money, with which you can end this (forced) quiet period. Although this is not a credit, you finance your company with your own invoices," says Remko Goeyenbier of Svea Finans . debtor management and you are 100% assured of your money."
When is factoring interesting?
Factoring is not only a solution when you have to deal with long payment terms. "As an entrepreneur, you also have to deal with a withdrawn or reduced credit limit, factoring offers a solution. Or think of an increasing debtor balance, resulting in a high DSO ratio (Day Sales Outstanding)," says Goeyenbier. By using factoring you reduce the DSO to one day for the invoices that you sell to the factoring company.
As an advisor or credit specialist, you can easily submit a digital application for factoring with multiple parties. Svea is one of those parties. What it means for your customer if the money from invoices is in his account within a day instead of having to wait 30 days for it, is quickly insightful with the forecast module of Fyndoo Advise. Want to know more about this? Please contact us.