Procure better invoice discounting offers

Invoice discounting is for companies that get paid late but have their expenses early. If your business has customers who pay their invoices after 30, or up to 180 days - then invoice discounting can be a good alternative to get quick access to capital.

With an invoice discounting agreements, you sell your company's invoices and receive cash that can be used immediately in the business. At Krea, you can learn about the benefits of invoice discounting, and get help finding the best solution for your business.

In Sweden, invoice discounting is sometimes called "factoring". However, there are some small differences between the two. As mentioned, invoice discounting is the process of selling invoices to an invoice discounting company. Factoring on the other hand, is when you receive a loan where the value ​​of the invoices constitute the collateral.

Invoice discounting agreements can vary greatly - with a commission ranging between 0.5% to 3% per month. By collecting several offers, Krea helps you make sure that you find the best price for your business.

At Krea, we have made it easy to add important documents in the application, such as account ledgers and accounting data. After submitting an application, it is easy to compare different offers and their total costs for recurring invoices.

In order to sign a new invoice discounting agreement with Krea, you are required to be a beneficial owner of the applying company. That means that you need to have a leading role and be an authorized signatory of the company, such as a CEO or board member. The applying company must also be registered and active in Sweden.

In addition to this, we have a few requirements on the invoices you wish to sell:

• Recurring sales - By selling invoices on an ongoing basis you will receive offers with better terms. Therefore, at Krea you must sell more than one invoice in order to sign an invoice discounting deal with us.
• A maximum of 90 expiry days - For financing over 90 days, we recommend business loans instead of invoice discounting as business loans usually have superior terms.
• The invoice recipient is creditworthy - By applying to several invoice discounting companies through Krea you can get an idea of which share of your invoices you can finance through invoice discounting agreement.
• The invoice must not be paid, overdue or older than 10 days old

The cost of invoice discounting can vary greatly with a commission between 0.5% to 3% per month. There are also additional costs (eg invoice handling fees). Krea get the invoice discounting companies to compete for your invoices before you sign a new agreement.

You can improve the terms you will be offered by sharing more information about your company's sales, e.g. account ledgers or accounting data.

As opposed to traditional factoring companies, Krea do not finance the mediated invoices. Instead, we have an active collaboration with new- and traditional invoice discounting companies and banks that are trying to offer you business financing with the best possible terms.

Within invoice discounting, we are collaborating with a number of invoice discounting companies: Finansia, Float Lending, Capcito, Billecta, and Qred. With Krea, when you are submitting an application you will also receive suggestions for other financing solutions from lenders including Resurs Bank, SVEA Bank, Marginalen Bank, Serafim Finans, Corpia, Mynt and others.

When you choose between different invoice discounting offers it is important to consider:

Qualitative criteria:

• Reminder and debt collection management - How does the invoice discounting company handle the contact with your customers? This is especially important for those customers who do not pay on time.
• Integration with accounting software - How easy will it be for you to register the invoice discounting in your accounting system? Most factoring companies we work with offer integrations with e.g. Fortnox.
• Credit Reporting - Do you have the possibility to make a credit report on your end customers?

Terms:

• Commission - How much of the total value of the invoice will you get paid? This can vary from anywhere between 97% to 99.5% of the invoice value.
• Invoice handling fee - If you have several smaller invoices, the total cost can be quite large. With us, you can compare the total cost of all your offers before making a choice.
• With or without recourse - If you sell the invoices without recourse, the invoice discounting company takes more risk, which usually leads to a slightly higher cost as well.

You can choose to sign an invoice discounting agreement where the invoices are sold with or without recourse.

Invoice discounting without recourse means that the buyer takes over the entire credit risk after the invoice purchase. As a seller, you can expect to always get paid regardless of whether the invoice recipient is late or does not pay the invoices.

Invoice discounting with recourse means that unpaid invoices are returned to you under certain circumstances. There is usually a time limit, commonly 30 days, when the bank or lender tries to collect the debt if it has not been paid. The bank or lender also verifies the process with you and ensures that the relationship with the end customer continues to be good.