Create and send invoices, keep track of your administration; it's all part of having your own business. Fortunately, there are also things you can outsource, so that you have more time for the activities that are more important to you. When you use American factoring you can grow your business more. How? You can read that below.
What is American Factoring?
American factoring has not been around for very long in the Netherlands. Since 2015, it has received more attention and this American style factoring is more popular. You do not have to go after invoices yourself. American factoring does not take over your entire credit management, but you choose to 'sell' your invoices individually to a factoring company . You are flexible about which debtor and which invoice you hand over. So you are not bound by a long-term contract, but you keep control yourself. However, the risk lies with the factoring companies and not you.
What's the difference with other types of factoring?
American style factoring is quite different from other types of factoring. In this way you hand over all the risk to the factoring company. In addition, with American factoring you will be paid 100 percent immediately (often within 24 hours). In other forms, there is 80-90 percent and later - when the customer has paid the invoice - the remaining amount. Do you want to use American factoring? Then your turnover is not considered. However, this does happen with traditional factoring . The costs for American factoring are somewhat higher than other types of factoring. This is mainly because it is so flexible, the risk lies with the factoring company and less strict requirements are imposed. The costs vary between 3 and 6 percent of the total invoice amount. The target group of American style factoring is mainly self-employed or SMEs .
What are the pros and cons of American style factoring?
There are of course pros and cons to American factoring.
- You sell separate invoices. You can have this paid out;
- You will immediately receive 100% payment;
- There is no turnover requirement;
- You are not tied to long-term contracts;
- The risk is not yours.
- The costs are higher than, for example, with traditional factoring;
- There is a stricter requirement for debtors.
- 100% paid immediately (within 24 hours);
- No long-term contracts;
- No turnover requirement;
- Risk is not yours;
- You choose per debtor and invoice which you outsource;
- Costs: between 3 and 6 percent of the total invoice amount;
- Particularly interesting for freelancers and SMEs.
You can request various quotations on our website. We help you find the right factoring company, so that you can take advantage of low rates and good conditions. We also show you at a glance which factoring company has which advantages. You will quickly see which company that does American style factoring suits you.