Factoring – Free up capital and improve cash flow

In order to sign a new factoring agreement with Krea, you first need to be the actual principal of the applicant company. A beneficial owner has a leading role and can be a signatory within the company, such as e.g. CEO or board member. The applicant company must also be registered and active in Sweden.

In addition to this, there are some minimum requirements for invoices that you want to sell:

• Recurring sales - By selling invoices on an ongoing basis, you can get better terms. Therefore, we require that you sell more than one invoice in order to be able to factor with us.
• Maximum 90 due days - For longer-term financing, we recommend business loans instead of factoring, as business loans then often have better terms.
• The invoice recipient is creditworthy - By applying to several different factoring companies at the same time, you can get an idea of how much of your sales you have the opportunity to finance through invoice financing.
• The invoice must not be paid, due or older than 10 days.

In factoring, a fixed percentage fee is typically paid for each invoice sold. In addition to this commission, the following possible costs may apply:

• Setup fee - paid at the beginning of the agreement
• Service fee per invoice - indicates administration fee per invoice
• Limit fee - indicates potential limit fee per year
• Annual fee - indicates potential fixed annual fee per year
• Reminder fee - It's also important to understand who bears a reminder fee for late payment (whether it's the issuer or the recipient)
• Collection cost
• Late payment interest

To apply for factoring with Krea, the applicant must be a signatory within the company, e.g. CEO or board member. The company must also be registered in and be active in Sweden and have a real principal registered.

Should you not be a company signatory but have a leading role in the company, you can always contact our customer service, kundservice@krea.se for assistance with the application.

We cannot help you if you are a private person or if you have a shell company, warehouse company or branch company.

Krea lets more than 30 banks and lenders compete for your business. The following actors have the opportunity to give you factoring suggestions:

Ikano Bank, A.B.S Global Factoring, Svea Bank, Invoier, Alfa Finans, Billecta, Capcito, CapIQ, Euro Finans, Finansia and FINQR.

In addition to invoice financing, your company can also receive proposals for business loans, property loans, business credit and/or leasing with the same application.

The following actors are able to give you suggestions for other financing solutions: Marginalen Bank, Froda, Svea Bank, Aros Kapital, Capcito, Capitalbox, DBT, Euro Finans, Fedelta, FundingPartner, Kameo, Mynt, OPR, Qred, Bizcap, Akela, Terox Finans , SBL Finans and Treyd.

For larger financing solutions, Krea cooperates with all relevant banks, including most major banks, for example Nordea and SEB.

The cost of factoring can vary greatly: from 0.5% to 3% of the invoiced amount each month. In addition to that, additional fees can be added (e.g. invoice handling fees). Krea helps you put factoring companies out to competition before you sign a new agreement.

You can also get better terms by sharing more information about your company's sales, e.g. ledger or accounting data.

When you choose between different proposals for invoice purchases, there are both qualitative criteria and conditions that you need to decide on.

Qualitative criteria:

• Handling of reminders and debt collection - How does the factoring company handle the contact with your customers? This is especially important for non-paying customers.
• Integration with accounting software - How easy will it be for you to book the invoice purchase? Most factoring companies we work with offer integrations with e.g. Fortnight.
• Credit report - Do you have the opportunity to take a credit report on your end customers?

Terms:

• Commission - How much of the invoice's total value do you get paid? This can differ from anything between 97% to 99.5% of the invoice value.
• Invoice handling fee - If you have several smaller invoices, this can add up to a large amount. With us, you can therefore compare the total cost of all proposals you receive for invoice purchases.
• With or without recourse - If you sell without recourse, the factoring company takes over more risk, which usually leads to a somewhat higher cost as well.

You can choose to sign a factoring agreement where invoices are sold with or without recourse.

Factoring without recourse means that the buyer takes over the entire credit risk after you have sold your invoices. You can therefore count on getting paid regardless of whether the invoice recipient is late with their payment or does not pay the invoices.

Factoring with recourse means that under certain circumstances unpaid invoices return to the seller. There is usually a deadline, usually 30 days, during which the bank or lender tries to collect the debt if the invoice is not paid. The bank or lender also adjusts the process with you as an invoice purchase customer, to ensure that the relationship with the end customer continues to be good.

If you use non-recourse invoce financing, the bank takes over the entire credit risk, which means you don't have to worry about whether the customer pays or not. However, your company is obliged to pay back the amount if the customer does not pay the invoice if you choose invoice financing with recourse.