Factoring 101 - A comprehensive guide for SMEs

Factoring

Factoring is a contemporary financing option that is becoming increasingly attractive for small and medium-sized enterprises (SMEs). This powerful method enables companies to improve their liquidity and overcome financial bottlenecks. In this comprehensive guide, you'll gain a thorough understanding of factoring and its potential to move your business forward.

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Introduction to Aequitex: Transforming SME Finance 

In the dynamic landscape of today's business world, SMEs often face obstacles when it comes to obtaining timely liquidity to drive growth. That's where Aequitex comes in - a revolutionary factoring platform that is reshaping the financing landscape for SMEs. Our main goal is to provide SMEs with simple, fair and fast access to the funds they need to grow.

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The power of factoring: A brief insight 

Factoring is a financing process in which a company sells its outstanding receivables (invoices) to a factoring provider. This strategic maneuver allows the company to access liquidity quickly and avoid waiting for customer payments. Aequitex is a factoring marketplace where SMEs can upload their customer invoices and sell them to investors.

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Decoding the mechanism: How factoring works 

The factoring process is designed for simplicity and efficiency. After delivering goods or providing services to customers, SMEs submit their invoices to Aequitex. Our platform carefully assesses the credit risk of the debtor and rates the invoices using the Aequitex Invoice Scoring Algorithm© enriched with real data sourced from reputable global financial institutions such as Dun & Bradstreet and Creditform. After validation, Aequitex makes the invoices available to investors for purchase.‍

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Get going with factoring through Aequitex 

Factoring through Aequitex offers a variety of benefits to small and medium-sized businesses:

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• Fast cash injection: companies can access funds quickly, strengthening their liquidity.
• Mitigating Risk: Aequitex or the investor can shoulder the invoice default risk, leveraging comprehensive evaluations based on real data
• Increased flexibility: Unlike traditional bank loans, factoring offers increased flexibility that grows with the company's expansion.
• Sharpening the focus on the essentials: The option of outsourcing accounts receivables management, allows companies to focus their energy on their core business.

The factoring offer at a glance 

Aequitex offers a range of factoring options carefully designed to meet the diverse needs of businesses:

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• Non-recourse factoring:  The factoring provider (investor) bears the entire debtor risk.
• ‍Recourse factoring:  Companies hold responsibility if a customer defaults on payment.
• ‍Silent factoring:  The customer does not find out about the assignment of the receivable.
• ‍Open factoring:  The factoring provider manages the entire accounts receivable process, including dunning and collection.