Why do you think businesses take on πŸ—Š Invoice Financing?


  • Funding Societies

    Hey there everyone!

    2 weeks ago you may have come across the article (I shared in this thread) outlining the various financing options businesses require, which can be provided by P2P platforms: business loans and invoice financing, as well as how you can identify businesses which require them.

    When a business e.g. a supplier issues an invoice to a customer, they are making an official notice for its customer to make payment for goods and services rendered, within a stipulated time frame. The customer is said to be buying from the business on credit terms

    In order for businesses to free up trapped cash and convert these invoices into cash, they can take up invoice financing with Funding Societies any time within the credit terms. .

    To offer everyone a deeper and more detailed understanding of invoice financing, I’ve prepared this article which aims to deal with these questions (you may be curious about as an investor):

    • Why do such businesses transact with customers in credit terms instead of receiving cash upfront?
    • How would they be able to better manage cash flow via invoice financing?

    Link to the article: https://blog.fundingsocieties.com/business/how-smes-can-turn-invoices-into-cash

    In which industries do you think businesses with such needs exist?

    Do share, would be happy to discuss them and learn from you πŸ™‚

    Should you wish to understand invoice financing better, comment below and let me know your thoughts.

    Cheers!



  • May I ask what are some of the B2B models that companies adopt?
    It seems that products with a longer intermediate or more transactions between B2B have higher chance of having cash flow issue


  • Funding Societies

    @alex-chua-c-e Not sure if I read your question correctly so please feel free to clarify if I didn't. Whether a company adopts a B2B model is really dependent on the industry and which part of the value chain it is in. Let's take potato chips as a product for example. For most of us as end consumers, we will get it from the Supermarket. The supermarket has a B2C model.

    Further up the value chain from the supermarket, there are distributors, importers, manufacturers, traders and potato farmers. They will likely adopt a B2B model since they are unlikely to reach the end consumer without the help of the supermarket because it might not be a finished product like a raw potato pre processing. Even when the potato is processed into potato chips, we as consumers would not be able to buy direct from the factory. It would need to be delivered to a warehouse, to an exporter, to an importer, to a country distributor and finally to the supermarket shelves.

    Hence, for the potato chips value chain example above, businesses engaged in any of the activities apart from the retailing at the supermarket, will benefit from Funding Societies' Invoice Financing solution.

    Do you know of any distributors or importers which sell to supermarkets? You can refer them to me via a PM. :)



  • @josephkoh Thanks. Sorry I don't know anyone. I suspect some of China business models like Alibaba have little intermediates because they have a marketplace for transaction between business to business or business to consumer.


 

Looks like your connection to Crowdfund Talks | A Community for P2P Lending & Alternative Investments was lost, please wait while we try to reconnect.