How Aequitex Closes the Gap in the Swiss Factoring Market

What is Factoring?

Factoring is a financing method where companies sell their outstanding receivables to a factor. This allows companies to pre-finance their invoices and gain immediate access to liquidity, rather than waiting for customer payments. Factoring helps companies improve their cash flow and avoid financial bottlenecks.

How Does Factoring Work?

Traditional factoring can be illustrated as follows:
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- The Factoring Client/Supplier - sells goods or services and issues an invoice to the customer.

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- The Factoring Client sells this invoice to a specialized factoring service provider or a bank and immediately receives a large portion of the invoice amount (usually 80-90%).
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- The Factoring Service Provider assumes the risk of defaults and manages collections.
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- The Customer pays the invoice amount directly to the factoring service provider/bank.

What is Aequitex Doing Differently?

The traditional factoring market is very sluggish, primarily bureaucratic and offline, dominated by a few service providers who control market prices and often do not even consider invoice volumes below CHF 150k. Therefore, small and medium-sized Swiss enterprises (SMEs) frequently do not have the opportunity to use factoring as a financing method. They are left with long-term commitments to banks through loans and credits.
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Aequitex aims to change this by providing Swiss SMEs with simple, fair, and fast access to liquidity. SMEs can upload their invoices to a digital peer-to-peer marketplace, offer them to a community of invoice buyers (investors) for purchase, and pre-finance them. At the same time, Aequitex offers registered investors on the platform liquid investment opportunities with high returns and calculable risks. Thus, any Swiss SME can pre-finance invoices starting from CHF 1,500 through Aequitex autonomously and fully digitally. Additionally, any individual can privately invest in Swiss SME invoices, support the Swiss mid-market, and earn money from it.

The Role of Aequitex

Aequitex does not purchase receivables itself but provides the marketplace for this purpose and thus acts as an intermediary between companies wishing to sell their receivables and private and institutional investors ready to buy these receivables. The risk of invoice default is assumed by the investor.

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The Main Functions of Aequitex:

Platform Provision: We offer a user-friendly online platform that digitizes and automates the entire factoring process.
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Risk Management & Rating: After careful examination and evaluation of the invoices and the creditworthiness of creditors and debtors, we publish the individual invoices on our marketplace, assign a rating to them, and enable investors to assess risks when building their invoice portfolios.
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Debtor Management: When selling, the SME transfers the rights to its receivables to the investor. The investor then transfers debtor management to Aequitex (only in the case of non-recourse factoring (open)).
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Transparency and Security: All transactions are carried out transparently and securely to ensure the trust of all parties involved.
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Data Protection: The protection of all parties' data is guaranteed.

Conclusion

Factoring is a powerful financing method that helps companies temporarily stabilize their liquidity. With its innovative peer-to-peer marketplace, Aequitex brings fresh air into the factoring market and offers simple, fair, and fast financing solutions for SMEs. Additionally, Aequitex provides private and institutional investors with an alternative form of wealth building through invoice purchasing, with high returns and calculable risks.

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