Is Factoring a Cost-Effective Solution for Micro-Entrepreneurs?

What does factoring for micro-enterprises involve?

In terms of procedures and benefits, factoring for micro-enterprises is analogous to the solution that factoring providers (banks and companies offering factoring services) have been offering larger businesses for years. However, meeting the needs of micro-entrepreneurs required certain changes. These were introduced primarily in the formalities. As indicated on https://finansowaniefaktur.pl/blog/mikrofaktoring/, everything at ING Invoice Financing takes place online. Processing the first document submitted constitutes the conclusion of an agreement with the bank. What is more, ING finances this first invoice free of charge—the promotion is available to new customers, with no additional conditions.

The next step is simplified verification. If it is successful, the bank transfers the money to the entrepreneur’s account within a maximum of 24 hours. If they decide to use factoring with ING regularly, they can receive a discount of up to 30%.

Clear rules, favorable terms

With ING Invoice Financing, the service costs are known from the very beginning. No additional fees will surprise the micro-entrepreneur. The factor’s commission is collected when the receivables from the invoices are transferred to the designated account. With this settlement model, it is easier to plan the company’s finances and, consequently, maintain cash flow.

Factoring for micro-enterprises is a service available even to businesses that have been operating for a relatively short time. Whereas the traditional invoice-financing model required a company to have been on the market for at least one or even two years, at ING the service is available to businesses operating for six months. There are also no high income requirements. There are no invoice limits—financing can be arranged for as little as one invoice. Documents in both PLN and euros are supported.

Is it worthwhile?

Factoring for micro-enterprises involves a certain cost, but the benefits are significantly greater. Receiving receivables immediately allows a company to maintain financial liquidity. This helps it avoid a difficult situation in which a lack of funds for continuing operations forces it to take out much less cost-effective loans or borrowings.

The absence of loan liabilities and retaining funds for current expenses also makes investments possible—so important for any business that wants to grow and improve its offering. Paying its own cost invoices, taxes and wages on time enhances a company’s reputation and strengthens its credibility in the eyes of, for example, potential contractors.

Thanks to factoring, a micro-entrepreneur can increase their competitiveness in the market by offering contractors so-called trade credit, that is, invoices with long payment terms. It is a service that is genuinely worthwhile, and in difficult economic times its benefits clearly outweigh the costs.