?> Invoice Finance Singapore | Read our 2022 Guide & Access Invoice Finance here

Invoice Finance Singapore- Factoring & Discounting from TFG

2022 Guide | Invoice Finance, Factoring and Discounting

Singapore Invoice Finance

Welcome to TFG’s Singapore invoice and receivables finance hub. Find out how our team can help your Singapore-based company unlock working capital from domestic and international invoices, on both a recourse and non-recourse basis. Alternatively, learn more about the different types of invoice finance: discounting and factoring, through our latest research, information and insights, right here, in our receivables finance hub.

What is invoice finance?

Invoice finance is a common form of business finance where funds are advanced against unpaid invoices prior to customer payment. Invoice finance houses include banks, alternative investment providers and private lenders, used by businesses who trade both domestically and globally. There are two types of invoice financing methods; discounting and factoring.

How can invoice finance benefit my business?

  • The invoice financier will sometimes take on the responsibility to look after your sales ledger which means the business owner can have more time to focus on the business
  • An invoice financier will conduct due diligence (including credit checks) on customers, which reduces the risk of not receiving funding
  • Invoice discounting can be done on a confidential arrangement, which means that your customers will not know that you’re using a finance house; this can help protect your reputation
  • Invoice finance allows you to maintain a good relationship with your customers, as you can fulfill larger orders on time without worrying about cash flow and working capital problems

Diagram: How invoice finance (receivables purchase) works

Receivables Discounting Diagram

How can we help?

The TFG’s Singapore invoice and receivables finance team work with the key decision-makers at 270+ banks, funds and alternative lenders globally, assisting companies in accessing factoring and discounting facilities.

Our team are here to help you scale up to take advantage of both domestic and international opportunities. We have product specialists, from commodities to finished goods.

Often the financing solution that is required can be complicated, and our job is to help you find the appropriate invoice finance solutions for your business.

Read more about Trade Finance Global and our Singapore team.

 

Get started – talk to our Singapore team



If you have an invoice finance or receivables enquiry, please use the contact form below.

 

Finance Queries:

sg.team@tradefinanceglobal.com

trade.team@tradefinanceglobal.com

Partnership Queries:

introducers@tradefinanceglobal.com

Find out more about partnering with us here.

 

Want to learn more about Invoice Finance?

You’ve come to the right place. Here you can find our latest Singapore features, receivables research, and trending articles in the world of invoice finance. Sit back, and catch up with the latest thought leadership and interviews from the region, listen to podcasts and digest the top stories in invoice and receivables finance right below.

From the Editor - Invoice Finance Insights

Market finder featured image Trade Finance Global launches international trade finance series with Google Trade Finance Global have partnered with Google (Market Finder) to launch a comprehensive trade finance series of guides.
Interview with Bob Wigley City Week exclusive: Bob Wigley on UK SME lending in 2022 Deepesh Patel (DP), Editor, Trade Finance Global interviewed Bob Wigley (BW), Chair of UK Finance, to discuss SME lending, our relationship with technology, and the impact of the pandemic ahead of City Week 2022.
Factoring strikes back VIDEO: Factoring strikes back – FCI’s Aysen Çetintas on expanding trade finance education after COVID-19 In 2020 the global factoring industry saw a 6.5% drop in volume – its largest one-year decline on record. 

Latest Singapore Insights

2021 Year in Review 2021 – A Year in Review with Trade Finance Global As the clocks struck midnight, we looked back at over 700 articles, handpicking our favourite stories that made the headlines in 2021
FCI Global factoring statistics 2020 decline FCI reports 6.6% drop in global factoring statistics in 2020 The first estimates for the factoring industry worldwide in 2020 have been announced today by the FCI’s Peter Mulroy. Factoring declines were recorded in most regions except Asia Pacific.
natural gas How to bring commodity finance into the twenty-first century A reliance on paper has hindered commodity finance for far too long. It should welcome digitalisation with open arms.
PODCAST Michael Vatikiotis on The Role of Modern Southeast Asia in the Global Economy S1 E13 TFT PODCAST: Michael Vatikiotis on The Role of Modern Southeast Asia in the Global Economy (S1E13) TFG are delighted to be joined by Michael Vatikiotis, who was the keynote speaker earlier today at FCI’s 51st Annual Meeting in Ho Chi Minh City, an experienced author, journalist and conflict moderator specialising in Southeast Asia.
Singapore2 FCI Interview: Randy Sim at IFS Capital on Commercial Finance, Singapore Singapore is home to more than 218,000 Small-Medium Enterprises (“SMEs”), defined domestically as firms with annual sales of less than S$100 million or less than 200 employees. These firms employ… read more →
Importing from Singapore Interview: Alan Wong at BFS on SME Finance in Singapore There are more than 200,000 SMEs in Singapore making up 99% of enterprises, employing two-thirds of the workforce, and accounting for about half of Singapore’s GDP. We spoke to Mr… read more →

Videos - Invoice and Receivables Finance

Hub Articles

How to use Invoice Financing for your Small Business

Invoice factoring for small businesses is fairly straightforward. As an example, an end customer might not pay the £100,000 invoice issued to them for up to 90 days, but your company needs the funds in 2 weeks, in order to pay for business expenses and salaries.

Read more →

How to use Invoice Financing for your Small Business

Why should I compare invoice factoring or invoice discounting providers?

There are several bank and non-bank providers of invoice finance, from large instutions to small alternative funders, each offering different propositions and solutions for customers.

Read more →

What is the difference between invoice factoring and invoice discounting?

Invoice factoring and invoice discounting are both types of asset backed finance aimed to help businesses release cash which are tied in invoices.

Read more →

What is the difference between recourse factoring and non recourse factoring?

The industry defines the two forms of factoring by risk. Invoice finance is effectively a line of credit obtained on the value of your outstanding sales ledger. Here’s what happens if your debtors fail to pay the invoices after you have financed them.

Read more →

What is bill discounting and how does it differ from factoring?

Bill discounting, also known as purchase of bills and invoice discounting are all the same type of financial instrument used to provide working capital to small and medium enterprises from invoices raised.

Read more →

Invoice Finance - Frequently Asked Questions

What's the difference between invoice discounting and invoice factoring?

Invoice finance is a type of receivables finance, which includes factoring and discounting.

Factoring is present when a business assigns their invoices to a third party and the factoring company has full visibility of the sales ledger and will collect the debts when due.

  • The customer has knowledge that the invoices have been factored. (This is the typical route a lot of funders offer, however – some can offer Confidential Factoring)
  • Factoring gives businesses up to 90% pre-payment against submitted invoices
  • This enables improved cashflow, and reduces the need to wait for payment
  • The company may receive their funds up to two days after invoices are sent out. Many factoring companies will offer to send money same day (TT Payment, usually carries a charge) or by BACS (Free)
  • A business can choose a ‘selective’ factoring or invoice discounting facility, dependent on the funder.

Typically, with Invoice Discounting, the borrower will have more control over their ledger. Again – like factoring, there is the option to do this on a completely confidential basis.

  • Invoice discounting is an alternative way of drawing money against the invoices of a business
  • The business retains control over the administration of their sales ledger
  • Invoice discounting usually involves a company reconciling with their invoice financier monthly
  • With factoring – each individual invoice is uploaded – with Invoice Discounting, a bulk figure is uploaded and then drawn down against with the monthly reconciliations showing where money is allotted to
  • Under a selective facility a business can opt to factor (i.e. lend) or invoice discount just some of the submitted invoices
  • A selective facility is a good option if a business needs a certain amount of cashflow guaranteed each month or if one or two customers are good payers.

The main difference between factoring and invoice discounting is that with factoring, a funder will have full visibility of your sales ledger and maintain this by chasing debts on your behalf. Invoice discounting on the other hand, allows you to keep your credit control in house but as we already discussed, it would require a monthly reconciliation with the invoice financier. Naturally, management fees for invoice discounting are usually a lot lower, however a company must demonstrate they have the correct procedures in place to support an Invoice Discounting facility.

What is factoring?

Factoring solutions offer the seller of a receivable a wider service than just the advance of funds to shorten its cash conversion cycle as the entity buying the receivable will also usually take on the responsibility of collecting the debt.

Factoring can take several forms. For example, a factor may agree, subject to limits, to buy the whole of a seller’s receivables. This is known as whole turn-over factoring. Conversely, a factor may select which invoices he wishes to buy. It can be with or without recourse to the seller and may or may not be notified to the buyer or obligor.

The vast majority of factoring is domestic and individual invoices are often of a low value. Cross-border factoring is possible using the two-factor system. One factor is in the buyer’s country (known as the ‘Import Factor’) and the other in the seller’s country (known as the ‘Export Factor’). The two Factors establish a contractual or correspondent relationship to service the buyer and the seller respectively under which the Import Factor in effect, guarantees the receipt of funds from the importer and remits payment to the Export Factor. Typically, the two factors use an established framework such as the General Rules for International Factoring (GRIF), provided by FCI. Read more about factoring here.

What is invoice discounting?

Invoice discounting solutions tend to focus on shortening a seller’s cash conversion cycle, as opposed to encompassing debt management and collection aspects. The degree of disclosure to the debtor under this type of facility varies, ranging from full disclosure to no-disclosure, depending on the level of comfort taken by the purchaser of the receivables over the nature and standing of the seller. In most cases, the greater the control the financing entity/purchaser of the receivables manages to attain over the process, the better the discounting conditions offered.

An invoice discounting facility without disclosure to the debtor will grant the seller of the receivables full confidentiality, and therefore avoid reputational hazards. Most invoice discounting is without recourse to the seller so as to ensure de-recognition of the receivables from the seller’s balance sheet (so-called “true sale”) but recourse is normally retained for commercial dispute e.g. where the buyer refuses to pay because the goods or service are defective. Read more about invoice discounting here.

Strategic Partners:

Get in touch with our Singapore Invoice Finance team

Speak to our trade finance team

Quick Links

Download our free invoice and receivables finance guide



Latest Singapore feature from Trade Finance Talks

Our Singapore factoring and invoice finance partner

Latest Singapore News

20Jun

TFG Weekly Trade Briefing, 20th June 2022

0 Comments

Your Monday morning coffee briefing from TFG:
2022 WTO conference extended to try and end deadlock… Read More →

15Jun

MonetaGo selected by the Association of Banks in Singapore to deliver Trade Finance Registry and combat duplicate invoice fraud

0 Comments

Financial technology solutions provider MonetaGo has been selected by the Association of Banks in Singapore (ABS) to deliver the Trade… Read More →

18May

Why the Queen’s speech is about to accelerate the acceptance of digital trade documents into English law

0 Comments

If a new trade bill is passed during the current UK parliamentary term, digital paperwork could be legalised under English… Read More →

25Apr

TFG Weekly Trade Briefing, 25th April 2022

0 Comments

Your Monday morning coffee briefing from TFG:
Bank of America will transition to recycled plastic for credit and debit cards beginning… Read More →

22Apr

Enigio’s trace:original technology patented in USA and Singapore

0 Comments

Enigio has been awarded patents for the digital original document invention behind their trace:original solution.  The patents were issued by… Read More →

18Feb

After two decades of steady growth, are we at a breakthrough moment for factoring in Asia?

0 Comments

Twenty years ago Asia had a 12% share of the global factoring market. Today that share is 25%.

In this article,… Read More →

31Dec

2021 – A Year in Review with Trade Finance Global

0 Comments

As the clocks struck midnight, we looked back at over 700 articles, handpicking our favourite stories that made the headlines… Read More →

16Dec

Gunvor secures $1.13bn LNG syndicated borrowing base facility with emissions measurement commitments

0 Comments

Gunvor Group, one of the world’s largest independent traders of liquefied natural gas (LNG), has signed a new syndicated borrowing… Read More →

13Dec

TFG Weekly Trade Briefing, 13th December 2021

0 Comments

Your Monday morning coffee briefing from TFG…. Read More →

10Dec

UK beats Europe to it, signs continent’s first digital trade agreement with Singapore

0 Comments

The UK has secured an agreement in principle with Singapore that will form the first digital trade deal signed by… Read More →

06Dec

ASEAN targets $1tn web economy by 2030 after launching landmark E-Commerce Agreement

0 Comments

The Association of Southeast Asian Nations (ASEAN) has launched a landmark trade agreement that could see the region’s web economy… Read More →

22Nov

PODCAST: Getting SaaS into surety and credit insurance – Tinubu’s co-founder talks insurtech

0 Comments

As the trade finance industry shifts towards more digitalised ways of doing business, new niches are opening up within the… Read More →

18Nov

Singapore: A model for a decarbonised maritime sector

0 Comments

For the Maritime and Port Authority of Singapore (MPA), the establishment of the Global Centre for Maritime Decarbonisation in August… Read More →

05Jul

TFG Weekly Trade Briefing, 5th July 2021

0 Comments

Your morning coffee briefing from TFG. The global economy could lose over $4 trillion due to the pandemic, world’s leading… Read More →

29Jun

Singapore and UK start negotiations on digital trade to cut red tape on e-transactions and e-signatures

0 Comments

Singapore and the UK begin negotiations this week, aiming to help exporters enter new digital markets and ease the barriers… Read More →

26Apr

UK and Indonesia strengthen trade ties launching the Joint Economic and Trade Committee

0 Comments

The UK and Indonesia have today (Monday 26) concluded the first round of exploratory trade talks and committed to further… Read More →

21Apr

FCI reports 6.6% drop in global factoring statistics in 2020

0 Comments

The first estimates for the factoring industry worldwide in 2020 have been announced today by the FCI’s Peter Mulroy. Factoring… Read More →

12Apr

TFG Weekly Trade Briefing, 12th April 2021

0 Comments

Your Monday morning coffee briefing from TFG. The IMF upgraded its growth forecasts for developed countries and said the global… Read More →

About the Author

Gabrielle Ann Vilda is an author at Trade Finance Global

Back to Top