Why your Business needs Invoice Financing now more than ever!
Emerging out of the Movement Control Order (MCO), many businesses will face significant debt and large cash outflows due to payments being deferred during the lock-down. Businesses will be forced to revitalise their operations with very tight budgets. With an injection of cash from CapBay’s Invoice Financing, you can accelerate your business’ recovery from the economic downturn.
Here’s why your Business needs Invoice Financing now more than ever:
1. Obtain SME Financing with Poor credit
Unlike other types of SME financing, CapBay’s assessment for an application is based on your buyer’s repayment ability instead of just SMEs own credit standing. This allows us to finance SMEs in Malaysia even if you have poor credit or high debt level, provided that your corporate buyer has a good repayment history and has the ability to consistently pay on time.
CapBay’s Invoice Financing allows you to leverage on your large corporate buyers’ creditworthiness to obtain financing.
2. No cash outflow involved
Contrary to loans, SMEs in Malaysia will not have to fork out SME Financing every month to repay principal and interest charges or even prepare for additional costs such as expensive legal fees and such. Instead, CapBay fees are deducted from the funds disbursed to you and the principal repayment is made by the Buyer directly.
With CapBay’s Invoice Financing solution, SMEs in Malaysia can get additional SME financing and not have to worry about how you will repay back.
3. Efficient SME financing
When compared to collateral-free loans, Invoice Financing is an efficient way of SME financing your business. Consider the following example:
| Scenario A: Term Loan | Scenario B: Invoice Financing |
|---|---|
| Company A takes up a clean (collateral-free) loan with an interest rate of 8% p.a or 0.67% per month. The company would need to pay Interest of 0.67% every month for the whole year even if they do not use the facility for some months. |
Company B takes Invoice Financing solution at 12% p.a. This amounts to 1% interest per month (12%/12 months). But Company B only needs to use Invoice financing for 2 invoices in that year, they only need to pay 1% p.a. for each month depending on the invoice tenure (eg 2 months each). Invoice financing only charges when it is being used. |
4. Cheaper than you think
When compared to Bank Overdraft, Invoice Financing is actually cheaper, even if the interest rate is comparably higher. Consider the following example:
| Scenario A: Overdraft Facility | Scenario B: Invoice Financing |
| For an Overdraft facility of RM 1,000,000, a bank would require you to provide a collateral such as Fixed Deposit of RM 500,000. This means you are only borrowing RM 500,000 instead of the facility amount. However, your repayment charges will be based on the facility amount which is RM 1,000,000. Therefore, in this example, you are paying twice interest for borrowing RM 500,000. |
With CapBay’s Invoice Financing, you are only charged for the RM 500,000 you have borrowed and you don’t have to pay for any hidden charges too! Invoice Financing only charges for what you actually borrowed. |
5. Grow at a faster rate
By having easy access to cash and SME Financing, SMEs can now afford to buy more raw materials and take more orders. What’s more is that SMEs in Malaysia will be able to offer longer payment terms to your corporate large customers which is an important selling point during this tough time.
Easy access to cash from CapBay’s Invoice Financing can truly accelerate your business’ growth with our proper SME financing solutions during this recovery phase.
6. Off-Balance Sheet financing
Since invoice financing is technically not a loan, it will not impact your debt-to-equity ratio. With CapBay’s Invoice Financing, SMEs in Malaysia are getting an advance cash on a scheduled receipt rather than borrowing funds. Thus, your debt figures are unaffected which makes it easier for you to have access to credit and making life a lot easier when it comes to getting Financing as SME in Malaysia.
Invoice Financing is hence an off-balance sheet SME financing method.
EXCLUSIVE OFFER:
From now until 31st July 2020, gain access to an additional Working Capital Financing of up to RM500,000 and enjoy a 20% discount on our platform fee. So, hurry and and apply now!
Eligibility criteria to apply for CapBay Invoice Financing
- You are a Malaysian registered business (includes sole proprietor, enterprise, partnership, and Sdn Bhd.)
- Your business is majorly (more than 51%) owned by Malaysians and has been in operation for at least 1 year
- You are providing services or goods to other Malaysian businesses or Government agencies on credit terms (B2B Business/B2G Business)
- You have mid-to-large size corporation(s) as customer(s) (private or public) or you have annual revenue of more than RM 2 million
