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COVID19: Invoice discounting to offset cash flow crunch

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Invoice discounting or receivables factoring is set to help companies offset the cash flow crunch in the aftermath of the Covid-19 pandemic and help boost their liquidity as businesses slowly return to normal operations.

Invoice discounting or factoring is the process whereby a non-bank institution purchases the trade receivables of companies involved in local or international trade.

Large companies or small-to-medium sized enterprises (SMEs) invoice their customers on credit, but instead of waiting until maturity to collect the money, they assign the invoices to the non-bank factoring company and receive immediate cash.

Eurivex Trade Finance is a rapidly growing non-bank institution offering factoring and invoice discounting service to local and overseas companies.

The funding is provided against assignment of the credit invoices without the need to provide personal guarantees or mortgage tangible assets. The assigned invoice is the only collateral taken into consideration.

Alternative funding

Speed is critical as solutions are required urgently and no business has the luxury of waiting for either the government to provide loan guarantees or risk becoming hostage to bank compliance and long delays.

SMEs need funding immediately which is why one of the best ways to secure funding is to resort to invoice discounting of the whole ledger or selectively assign the invoices of specific companies for immediate funding.

Eurivex Trade Finance provides alternative funding solutions through fast and simple procedures with flexible solutions for both local as well as overseas customers.

Companies only need to supply their latest audited financial statements and management accounts as well as debtors’ ageing for the initial evaluation, after which a funding offer is made with clearly defined terms and conditions including transparent and competitive pricing.

Invoice protection

Eurivex also provides invoice protection to reduce the risk of customer defaults through credit insurance and its arrangement with Euler Hermes, the global credit insurer which provides coverage in Cyprus, Greece and more than 50 countries.

The majority of SMEs have huge exposure to potential bankruptcies of their customers who have piled up debt prior to the Covid-19 pandemic and are now unable to pay their obligations or will potentially be asking for easier credit terms.

The likely relapse of the Covid-19 pandemic in autumn raises a need for financing contingency plans not only for SMEs but for all companies.

Such a relapse could have a catastrophic impact on businesses and the economy hence businesses must be prudent enough to secure extra funding early enough.

The cost of securing such immediate liquidity is negligible when considering that it can save a business without putting additional pressure on the owners.