Fellow Finance Adds Invoice Financing

Finnish p2p lending service Fellow Finance has opened a new invoice finance service for companies, which allows businesses to convert their trade receivables into cash immediately. In the new invoice finance service, a company gets funding against its invoice receivables directly from investors.

Fellow Finance says the opening of the new invoice finance service by Fellow Finance ensures that small and medium-sized companies will receive a new flexible funding channel alongside traditional business loans. In Fellow Finance a company only uploads its invoice receivables in to the service and receives a funding offer immediately. When the funding offer has been accepted, the company receives the money immediately against the invoice receivable. This will make the pay of working capital needs easier for companies suffering from long invoicing periods up to 60 days.

“Financing a trade receivable is one of the easiest and most reasonable ways for companies to acquire working capital. By financing an invoice, a firm immediately receives its money, which accelerates money circulation and supports the growth of the business. The invoice finance service by Fellow Finance is technologically a forerunner compared to traditional services and operators in Europe, “says Jouni Hintikka, CEO of Fellow Finance.

With new invoice finance functionality investors have now the opportunity to invest in companies’ short-term invoices. Basically, this means that a company offers its invoice to the marketplace of Fellow Finance to be funded by investors. Fellow Finance always does a credit rating for the invoice entered for financing based on the receiver and payer of the invoice contract. In addition, the credit risk is not transferred to the investors, but it is retained by the company that finances the invoice. The annual interest rates of invoice financing for investors are on average between 6-10%.

In adjacent Estonia p2p lending marketplace Investly, which specializes on invoice financing for Estonian and UK SMEs, is growing. The last figures we reported for them show 78% month on month and 319% y-o-y growth.

Workinvoice Completes Securitization

In January 2017, Factor@Work (an Italy based portfolio manager) has completed the purchase of 5 million EUR of corporate receivables through a securitization vehicle. All the assets have been originated by Workinvoice, an Italian invoice trading platform.

A first for Italy’s securitisation market, the deal was arranged by Workinvoice, while Zenith Service acted as SPV provider and master servicer. The receivables being securitised were sold by Italian small and medium sized enterprises (‘SMEs’) through Workinvoice’s invoice trading platform, and were originated by Workinvoice.

As part of this new securitisation model, Italian SMEs utilize the platform offered by Workinvoice to offer for sale some of their trade receivables held against their clients; the investor may then enter into a credit insurance agreement with an insurance company.

Workinvoice states that based on the receivables that have a low default risk and a high turnover, invoices securitization is a multistep process of providing a financing source by transforming illiquid assets into securities, resulting in the liquidation of the assets and the creation of new financing sources. Continue reading