In simple terms, invoice financing functions in the same way as a revolving credit line or a series of short-term bank loans. Invoice financing can be used across your whole sales ledger, or you can choose the customers and the invoices you want to use for a loan (this is called selective receivables financing). In most cases, the customer will never know you used the invoice as security for a loan. Once the loan is repaid, and the lender deducts interest and fees, the balance is transferred to your bank account. The customer assumes they are paying you, not the lender. You retain control of your sales ledger and are still responsible for chasing your customers for payment.Ĭustomers post their payments into a trust account controlled by the invoice financing company, but with the appearance of an account controlled by you. The sum received may vary from 75% to 95% of the invoice value. Payment is usually made within 48 hours of submitting your invoice. Very often banks do not finance international deals because they don’t work in jurisdictions other than their home countries.With invoice finance, you issue an invoice to a customer, then you receive a percentage of the invoice value as a loan from a lender (the invoice financing company). It will provide funding where banks often won’tįinally, Stenn specializes in financing cross-border trade. For example, a company with assets of only $50 000 (USD) could finance a shipment of goods worth $500 000 (USD) if the buyer fits the criteria. It can also give smaller companies tremendous leverage. It also offers a much higher limit than bank credit typically would - up to $10 million (USD) per buyer - and covers you against the risk of your buyer failing to pay your invoice. Stenn’s online invoice financing is much faster than a bank (assessment is quick and funds are paid within 48 hours of only two documents being signed) and is better than a loan (it has no influence on credit history, needs no collateral, and requires no lengthy applications and interviews). Read more about invoice financing here.įind out more in this video from Stenn’s founder. This is particularly comforting when trading internationally with new buyers.
Stenn’s platform provides what is known as ‘non-recourse financing’, which means that suppliers have no risk of non-payment. The cost of such financing is usually 0.65% - 3.8% of the invoice value (which equates to an Annualized Percentage Rate (APR) of 7.9% - 11.4%) and Stenn takes the risk of the buyer defaulting. Invoice financing means that sellers can offer such terms without tying up their capital and can deal with new foreign buyers without risking non-payment of invoices. In competitive international export markets, allowing buyers to pay later gives sellers a competitive advantage. It means that suppliers can get their invoices paid as soon as the goods are shipped, yet their buyers will not have to pay for them until later, giving buyers time to receive the goods and make use of them. Stenn’s invoice financing platform provides fast payment of invoices and frees up working capital that could be tied up for between 30 - 120 days in international trades.
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