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Factoring SMEs

You have a small and medium-sized business and things have been going quite well for a number of years. You have customers, a few employees and can make a living from the company you have built. Very nice of course. And now you naturally want to continue to grow and develop. How can you spend your time on this without having to spend too much time and energy on invoicing? SME factoring. Do you know that? We are happy to explain to you what it is and how it works.

Factoring for SMEs

Nothing is more annoying for your company if invoices are not paid or are not paid on time. You also want to continue with your company and there are also costs involved. Fortunately, there is a solution for this: SME factoring . What does factoring entail? You have your invoices taken over by a factoring company . They 'buy' your invoices, so that you can partially or completely outsource your credit management. The factoring company pays you your outstanding invoice immediately (within 24 hours). This way you immediately have your money and there is no risk of non-payment.

The right legal form for your company

When starting your business, you may not immediately think of the term 'legal form'. Yet this is very important. When you register with the Chamber of Commerce, you immediately choose your legal form. You must choose a legal form to conduct your business. This is important for the tax liability and liability of your company. There are different obligations for each legal form. You can still switch legal form. However, this takes a lot of time and money.

If you opt for a legal form without a legal entity (such as a sole proprietorship , partnership ), then you are liable with your entire private capital if there are debts within the company. If you opt for a legal form with a legal entity (think of a Ltd), the company has independent assets and liabilities. You are therefore not personally liable.

After choosing the right legal form, you will have to deal with insurance. This includes business liability insurance, accident insurance, legal expenses insurance, professional liability insurance, absenteeism insurance, etc. You are not obliged to insure in all cases. It is not always necessary. You can obtain information about this from an insurer.

If you want to cover yourself voluntarily against certain risks, you can also cover risks with factoring in addition to insurance. SME factoring is arranged by factoring companies. They pay you and then settle the payment with your customer. You do not have to worry about this. Often you run no risk here, because it is borne by society.

Advantages and disadvantages of factoring SMEs

There are several pros and cons to freelance factoring. It is important to find out which advantages and disadvantages in the list below are important to you.

Benefits

  • You do not bear the risk yourself (usually);
  • You will receive up to 100% paid immediately (within 1 day);
  • You can choose to outsource your accounts receivable administration.

Cons

  • You do not cover everything with this;
  • Not every customer likes this way. This may diminish your relationship with your customer.

Costs for SME factoring

The prices of factoring for SMEs differ per type of factoring. Typically, the fees vary between 3 and 6 percent per outstanding invoice. You will therefore be paid in full minus the cost of the percentage. Sometimes additional costs are also deducted. In any case, know what you are getting into.

Compare providers

There are plenty of providers on the market that offer SME factoring. You decide which one suits you best. You can leave your details via our website, after which we will offer you an overview of the companies that suit you best. This gives you a quick overview of which companies offer factoring and what the benefits are. Before you start working with a factoring company, you should read the conditions carefully. Then you know where you stand. Do you need help looking for factoring companies?

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