Invoice Financing in Singapore
You can get funding based on your outstanding invoices via accounts receivable financing.
- At least 6 months in operations
- Invoice to reputable debtor
- Business registered and operating in Singapore
Disclaimer: These are general qualifications. Other information might be considered during your application.
There are a few kinds of invoice financing. To find out more on the options, you can contact one of our capable specialists
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Invoice Financing at a glance
Invoice Financing – also known as accounts receivable financing lets business owners to get funding using their outstanding invoices. The Financiers will lend out money using the outstanding invoices as a collateral. You can get up to 80-90% of the value of the unpaid invoices.
The Pros and Cons
Get the money sooner than the invoice payment date
The invoices act as a collateral
Higher fees compared to traditional financing
Shorter tenure compared to traditional financing
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2 – 3 weeks
3.2 – 4.5% per annum
Personal Loan for Business
3 – 7 days
4.4 – 6.88% per annum
2 – 4 weeks
2.3 – 2.8% per annum
2 – 3 weeks
2.8 – 3.2% per annum
1 – 3 weeks
12 – 16% per annum
Business Term Loan
2 – 3 weeks
5 – 7% per annum
1 – 2 weeks
7.8 – 12% per annum
Who Qualifies for Invoice Financing?
If the business has outstanding invoices and have a decent credit history, you can qualify for an invoice financing.
The financiers do not take the turnover, net profit or the incorporation date of the company into consideration as much as the invoice or the credibility of the invoiced party.
The amount of financing you can qualify for relies on the quality and the value of the outstanding invoice. It also relies on your credit score and the invoiced party’s credibility.
Some financiers will also look at your credit score as well.
What Documents Do I Need to Apply?
Profit & Loss Statements
Income Tax Returns
Identification Card (NRIC) / Copy of Passport
“Invoice financing helps you get paid on receivables sooner, so you can seize business opportunities.”
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Why Invoice Financing?
There are times when customers do not pay on schedule, and this causes a cash flow issue for your business. These held up payments will affect your business’s operations giving you a complication.
From our experience, this problem occurs quite frequently with SME owners. This is why we are offering accounts receivable financing.
There is no delay with accounts receivable financing with a very short turn-around time of 1-5 working days from the day of application to the disbursement of funds.
Dealing with your cash flow problems using accounts receivable financing is basically what it can help your business with.
Although invoice financing is a rather costly way to fund your business, it helps you operate your business with a more consistent and calculable cash flow. If your business is low on working capital, has an urgent expense is anticipated such as wages or taxes, or even funds needed to embark on a new venture, that is where invoice financing can benefit your business.
Cost of Invoice Financing in Singapore
In the event where the Financier has approved your invoice for an invoice financing, the financier’s will generally disburse 80-90% of the total value of the invoices in funds to you. The rest of the amount will be paid once your customer pays off the invoice.
The fees charged by the financiers can be anywhere from 1% – 2.5% a month, depending on the strength of your company and your debtor’s company as well as a one-time processing fee of the total amount being disbursed.
Basically, accounts receivable financing is a cost for your business’s convenience.
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How it Works
For instance, you want to get an accounts receivable financing of a $100,000 invoice with a 60-day term.
The financier disbursed 80% of it, which is $80,000. Your client then pays the invoice to you 60 days later. The financier charged you a 2.5% processing fee, which sums up to $2,500, on top of that charges you 1.5% a month, which sums up to $3,000. The financier then gives you the remaining of $14,500. The total charge for this invoice financing is $5,500 for a 2-month loan.
$5,500 for a 2-month loan of $100,000 may be considered a high price to pay, however it really depends on your business’s urgency for funds.
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