Factoring providers at a glance
You will find over 250 factoring providers on the Internet, the number of which is constantly increasing. Before you choose one of them, you should take a close look at what services they offer and what factoring costs they charge. Because the conditions of the providers differ significantly from each other.
According to HOWSMB.COM, the Young Founders portal has put a few factoring providers under the microscope and put together six of the best. Please note that the interest and fees can change continuously.
The following providers are recommended for the companies listed in brackets at the current fee listed:
Aifinyo is a financial services provider that has been offering coordinated liquidity solutions since 1998. The provider is suitable for all companies, including sole proprietorships , and currently offers factoring, finetrading, debt collection and leasing from a fee of 1.5%. After a credit check, you will receive an individual factoring offer including a contract, which you can sign and return. The purchase of receivables can then start.
Billie is a short-term liquidity security product suitable for small and medium-sized businesses. You can currently use Billie from a fee of 0.7% and choose between a Classic and Premium variant.
As for all businesses, for small and medium-sized companies, too, an overview of the current company figures and bookkeeping is essential for business success! Use professional accounting software for SMEs – for companies of this size, this is the right solution at a reasonable price!
With Compeon you can finance your company in 3 steps. The finance portal is particularly suitable for medium-sized companies in various industries. You can use Compeon from a fee of 1.25%. With Compeon you will find the optimal financing solution for your company.
decimo has been a factoring provider for many years and is best suited for freelancers and small to medium-sized companies. You can simply register and use factoring for freelancers from a fee of 0.5% .
With its invoice pre-financing, finiata is a suitable alternative to traditional loans. Above all, freelancers and the self-employed can use finiata from a fee of 2.99% and without a fixed contract period.
Fundflow is a financing platform that has been used to pre-finance unpaid invoices easily and conveniently since 2015. Fundflow is suitable for freelancers and small businesses and currently works from a 2.5% fee. You can register very easily, you have no contract term and you will receive an instant offer for the terms of your financing.
Other forms of external financing
In addition to factoring, there are other options for external financing . For example assignment and forfaiting.
Difference between factoring and assignment
With an assignment, you don’t sell your receivables, but merely assign them to the bank as collateral if you want to take out a loan. In return for the claims, the bank will then grant you a corresponding line of credit. But this procedure has no further effect on your balance sheet.
Difference between factoring and forfaiting
The forfaiting is closely linked to the factoring than the assignment. Because here, too, the receivables are resold. Even so, there are three important differences:
- First of all, it involves much larger sums than with factoring typical for medium-sized companies.
- In addition, forfaiting is usually used for large individual claims, whereas factoring is based on many small claims or selected claims (detail factoring).
- Finally, factoring deals with the receivables for services already provided or goods shipped, and forfaiting deals with future services that have yet to be provided.
Factoring or leasing – which is better?
As well-known special forms of financing, leasing or so-called mezzanine capital, i.e. a mixture of equity and debt capital, are also possible. Factoring and leasing are two variants that can often be used as an alternative to a loan in order to increase liquidity as quickly as possible.
But should you prefer factoring or leasing? Which variant is the better? Unfortunately, we cannot give you a general answer to this question. Because there are various individual variables and requirements to be taken into account.
After all, these are completely different measures. With leasing, you rent equipment or services for a fee, while with factoring, you sell your receivables. There are different costs that you have to bear over different terms. Here you have to check in each individual case which option is more profitable for you.
Aside from assignment and forfaiting, you can also use other forms of financing. In the area of external financing, equity or equity financing as well as external financing come into consideration.
For this you can contact your house bank, but also suppliers or shareholders, or you can get the money you need through stocks and bonds.
While self-financing with the help of equity procurement depends heavily on the legal form of your company, you can take simple and familiar paths with external financing. Bank credits, loans, debentures or supplier credits come into question here in particular.
Factoring is not equally suitable for everyone, but it is a good way to quickly resolve a liquidity bottleneck. Apart from the costs, there are many advantages for you.
Due to the many factoring companies on the market, you will find the right one for every purpose that can offer you the best possible service. Due to the variety of services and costs, you should make a precise comparison in advance and pay attention to the references.
This allows you to get money faster to pay off your debts, make investments quickly or buy new material for further assignments. In addition, you can transfer the tedious collection of customers who are known to be slow paying customers to third parties. And that too, by shifting the risk of failure to the factor.
For this reason, full service factoring is a popular form for companies to handle their receivables management . After all, these factoring companies have a good reputation and enormous expertise thanks to the necessary regulatory approval and strict controls, which you can benefit from.
Mainly the protection against bad debts is a big plus. That is why over 30,000 German companies from a wide variety of industries are already relying on this option and using it regularly.