Factoring

Connect with investors who are ready to purchase your outstanding invoices, providing immediate funds to improve cash flow cycle and accelerate your business growth. Enjoy the streamlined process, transparent operations, and dedicated support that come with invoice factoring through Africa Trade Credit platform. Propel your business confidently into the future.

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Factoring

Our platform offers factoring services as a financing solution that allows businesses to sell their accounts receivables on our platform to a third-party financier. The financier takes over ownership of the receivables and collects the debts from the company’s customers. The Factoring service is particularly beneficial for businesses that require a quick injection of cash to improve their cash flow management.

Financing is provided based on accounts receivables

The invoices sold to the factor will determine the financing that will be made to the seller.

Ensures quick access to cash

the invoices are funded immediately by the willing investors or financing companies in our platform providing seamless and efficient funding process.

No collateral is required

Our platform utilizes KYC information to generate creditworthiness and risk profiles, eliminating the need for pledging assets as security.

Helps align companies’ financial planning

enhances financial planning by converting outstanding invoices into immediate cash, improving cash flow predictability, and enabling informed decision-making for companies.

Provides flexible financing options

Repayment of the funding provided on the invoices is done depending on the initial company or customer delay to pay for the invoice.

100% digitized KYC

KYC documents and financial or banking statements are provided during the on-boarding and registration process.

Understanding Africa Trade Credit Factoring

We recognize the importance of maintaining a stable and consistent cash flow for the growth and success of your business. Our Factoring service offers a solution by providing immediate funding through investors who extend credit for your accounts receivable and payable finances, which are paid at a later agreed-upon date when the organization is financially ready. This efficient and flexible method eliminates the need for traditional bank loans, credit finances, and delayed payments that can adversely impact cash flow.

Benefits of Factoring

Factoring is a widely-used form of trade financing that offers several benefits to businesses, ranging from improving cash flow to reducing risk and enhancing credit rating.

LENDERS

  • Access to new and profitable lending opportunities with little or no investment
  • Funding of a confirmed end-purpose
  • Digital and standardized underwriting process
  • Easy to scale-up

SELLERS

  • Access to early liquidity against goods and services provided to Buyer
  • De-risking of receivables
  • Off-balance sheet funding

BUYERS

  • Healthier Supply Chain
  • Additional lever to negotiate down procurement prices
  • Higher stickiness of Sellers

How It Works

01

Sellers provide products and services to buyers

  • Sellers supply goods or services to buyers in exchange for payment
  • This represents the core transaction process where sellers fulfill the needs of buyers by providing products or services.

02

Buyers collaborate with investors to promptly pay suppliers’ invoices

  • Buyers may work with investors to secure financing for paying for the goods or services they receive from sellers
  • By partnering with investors, buyers can ensure they have the necessary funds available to make timely payments to suppliers, thereby maintaining good relationships with them and keeping the supply chain running smoothly

03

Sellers receive immediate payment, and buyers can maintain their financial plans without disruption

  • Buyers can promptly pay sellers by working with investors to ensure timely payment of suppliers’ invoices.
  • This allows sellers to receive payment quickly and helps them maintain a healthy cash flow
  • By maintaining sound financial planning, buyers can continue investing in their businesses and experiencing growth without being hindered by delayed payments to suppliers

FAQs 

What is Factoring?

Factoring is the practice of using company’s unpaid invoices to raise working capital & fulfil its financial needs. Financial institutions including Banks and NBFC Factors provide discounting services for businesses.

What are the different types of businesses that are eligible for loans?

We offer Factoring to all Businesses registered as Proprietorship, Partnership, Private Limited, Limited Liability Partnership and Public Limited Companies.

When is the financing disbursement done and to whom?

The financing disbursement is done by the Lender to the designated Bank account of the Seller within 24 hours, as per the process agreed.

What are the terms of repayment?

Repayment is made by the Buyer to the respective Lender any time before the end of the credit period. The credit period for each invoice ranges between 30 to 120 days, as per terms agreed with the Buyer. The interest is charged only for the actual period for which credit was used.

What is the mode of repayment?

Using auto debit facility via NACH.

Do I need any collateral to avail a Factoring facility?

There is usually no additional collateral required, as our Lending Partners provide this facility on the strength of the respective Buyer and the assessment of cash flows due within the cycle. However, in some case lenders may request for collateral based on their assessment of the risks involved.