Finance your VSE's invoices easily with Hero

Why factor when you're a small business?

Factoring offers many advantages for very small businesses, including :

More competitiveness

Factoring enables very small businesses to have immediate cash flow, without having to wait for payment from their customers. This enables them to finance their working capital requirements, pay suppliers and employees, and make new investments. In this way, factoring boosts the competitiveness of very small businesses, offering them greater flexibility and responsiveness.

Replacing or supplementing bank financing

Factoring can replace or supplement bank financing This is often difficult for very small businesses to obtain. In fact, banks often require guarantees, sureties or mortgages, which VSEs cannot always provide. requires :

• Pas de personal guarantees ;

• Pas de joint surety ;

• Pas de collateral of the business.

Factoring gives very small businesses access to simpler, faster financing.

Delegation of collection

Factoring enables very small businesses to delegate invoice collection to a factor This enables them to :

• Free yourself from the administrative tasks associated with customer service;

• Reduce payment times;

• Limit the risk of non-payment.

Factoring enables very small businesses to to focus on their core business and gain in efficiency.

Save time on invoice management

Factoring enables very small businesses to save time managing their invoices This enables them to :

• Send their invoices to the factor ;

• Track the status of their financing ;

• View their account ;

• Download their documents.

With factoring, very small businesses simplify and optimize accounting and financial management .

Protection against bad payers

Factoring enables very small businesses to protect themselves against bad payers, thanks to the guarantee against non-payment. It consists of compensate VSEs up to 100% of the amount of their invoices in the event of customer default. Factoring enables very small businesses to secure their cash flow and prevent financial losses.

Shorter payment terms

Factoring enables very small businesses to shorten invoice payment times by obtaining a cash advance within 24 hours of transmitting invoices to the factor. This enables very small businesses to reduce the time lag between cash receipts and disbursements, and improve their financial equilibrium. Factoring enables very small businesses to meet their deadlines and seize opportunities for growth.

How do you choose a factoring company when you're a very small business?

As a small business, choosing the right factoring company requires a thoughtful approach. Here are the criteria to consider:

• Sector expertise . Choose a factoring company that understands the specifics of your business sector, making it easier to manage transactions.

• Factoring company size . Make sure the company you choose is the right size for your very small business, to ensure a personalized relationship and a thorough understanding of your needs.

• Costs and fees . Compare the rates and fees offered by different factoring companies. Make sure you understand all associated costs, including hidden fees.

• Reputation and testimonials . Consult previous customer reviews and search for testimonials to assess the factoring company's reputation. This can provide valuable information on the reliability and quality of the service.

• Flexible services . Choose a factoring company capable of adapting to your changing needs. Flexible services are essential to support the growth of your very small business.

• Collection process . An efficient process ensures rapid invoice collection and minimizes the risk of non-payment.

• Contractual transparency . Make sure that contractual conditions are clear and transparent. Read contract terms carefully to avoid any unpleasant surprises.

The different forms of factoring for VSEs

There are various forms of factoring, adapted to the needs and constraints of very small businesses. Here are the main ones:

Conventional factoring (full factoring)

Conventional factoring is the most common and comprehensive form of factoring. It involves entrust the factor with all the invoices issued by the MSE, as well as the management of collection and the guarantee against non-payment. Customers are informed of the factoring contract and must pay the factor directly.

Conventional factoring enables very small businesses to benefit from immediate financing, secure receivables and delegation of administrative tasks .

Spot factoring

Spot factoring is a form of factoring which allows the VSE to choose which invoices it wishes to assign to the factor, according to its cash flow needs. no long-term contracts or minimum sales thresholds . Customers are informed of the factoring contract and must pay the factor directly.

Spot factoring enables very small businesses to flexible cash flow, with no commitment and no personal guarantees.

Fixed-price factoring

Flat-rate factoring is a form of factoring which offers a fixed, predictable cost based on the number of invoices and customers to be managed It doesn't depend on invoice amounts or payment terms. Customers are informed of the factoring contract and must pay the factor directly.

Flat-rate factoring enables very small businesses to control your budget, reduce costs and simplify your accounting.

How much does factoring cost for VSEs?

The cost of factoring for a VSE depends on a number of factors, such as :

• Le sales ;

• Le number of customers ;

• Le invoice amount ;

• Le payment terms ;

• Le sector activity ;

• La quality of receivables ;

• La factoring company chosen.

Generally, it oscillates between 0.3% and 4% of the total value of assigned receivables (incl. VAT) by the company. This pricing includes various elements such as :

• Additional costs ;

• Interest rate or financing costs ;

• Service charge or factoring commission.

What are the disadvantages of factoring for VSEs?

Despite the many advantages of this practice, there are also disadvantages. Here are the main disadvantages of factoring for VSEs:

Limiting financing

Factoring does not finance the full amount of invoices but only part of it, depending on the factoring company and the need to build up the factoring fund. guarantee. plus, factoring does not finance unmatured invoices, disputed invoices and invoices without purchase orders .

Impact on sales margin

One of the major disadvantages of factoring for very small businesses is its cost, with fees and commissions which can reduce profit margins, impacting the company's overall profitability.

Financial dependence

Factoring may create financial dependence on the factoring company This limits the VSE's financial flexibility and autonomy in managing its cash flow.

Contract complexity

Factoring contracts can be complex, with terms and conditions that are sometimes difficult to understand .

This complexity can lead to surprises and misunderstandings (especially for very small businesses), requiring particular care when negotiating contracts.

Customer relations risk

When receivables management is outsourced The direct relationship between the VSE and its customers may be affected. The letter carrier can act on its behalf for collection, which can potentially impact customer relations.

How can you have your invoices financed quickly and cost-effectively with Hero?

At Hero we are a payment and financing platform . We support the growth of very small businesses. Integrated into your sales process, Hero anticipates payment for net sales shipped In concrete terms, you can offer your customers payment facilities such as deferred payment or payment in instalments (3 or 4 times). However, the platform immediately advances the payment, so your cash flow is protected.

Customers benefit from flexible payment terms, online, offline or in-store, with a 100% deferred payment guarantee.

On the other hand, you can also pay your suppliers later, or pay in 3 or 4 instalments. In the same process, the platform advances immediate payment of your invoices.

Hero is positioned as a a cheaper, more flexible alternative to factoring adapted to the constraints of very small businesses.

In short, VSE factoring can be a strategic solution, facilitating access to liquidity and optimizing flow management financial encourages stronger links between suppliers and customers, optimizes cash management, and creates opportunities for negotiation. Its positive impact on cash flow makes the affacturage TPE a sensible option for strengthening the financial health of small businesses.

Other articles on the same subject:

• Factoring: what is it and how does it work?

• Spot factoring: definition, advantages, operation

• How much does factoring cost and how can I calculate it?

• SME factoring: finance your invoices easily with Hero

• Factoring for training organizations: Hero makes it easy to finance your invoices

• Online factoring: finance your invoices online with Hero

• Factoring contract: definition and how to draw it up

• Factoring company: what is it and what is it for?

• E-factoring: what is it?

• Factoring: what is it?