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If they want to extend for an extra 30 days, it will cost them just 1% of the total invoice amount. You can offer 60 days extrato pay their invoice. Instead of waiting until the work is completed, we recommend that you discuss Fellow Pay with your customers. This rules out businesses that collect money the moment they send an invoice. But unlike a loan or line of credit, you must have already completed work for your customer and be waiting for that payment to land in your account. If industry standard long payment terms are affecting your ability to grow, and you want the money from those invoices in your account as fast as possible without hurting your customer relationships, Fellow Pay is perfect for you.

If you’re approved, you and your client will get an agreement, once signed you’ll receive the money and they’ll get their credit immediately. Factoring costs are at least 4% and up - and come with a range of additional fees. Fellow Pay costs just 3,75% of the invoice amount and your buyer gets 60 days extra to pay their invoice. So you’re A LOT more likely to get approved with Fellow Pay. We only care about your customers' credit rating. Thirdly, your credit rating doesn’t matter. With Fellow Pay, you’ll get the money seconds after you and your client sign the agreement. Invoice factoring is a slow process - often weeks. Not reactively and at the last minute like with factoring. With Fellow Pay, you offer your customers 60 days extra to pay their invoice, so you can get paid immediately. ‍ Fellow Pay How does Fellow Pay differ from invoice factoring?‍įirstly, with factoring you hand over payment collection to a factoring company. Unlike factoring, they benefit you and your customers and are designed to support your growth rather than just your survival. Thankfully, there are other options that offer similar services. Many factoring companies also require that you enter into a long-term contract.

Plus, most companies work with factoring companies when they’re experiencing cash flow issues. Since factoring companies collect payments directly from your customers, you’re putting part of your customer relationships into their hands. This eats into your profits making it difficult to grow. Now new alternatives offer fairer solutions for SMEs‍įactoring can be expensive. Although, if you have a poor credit rating you’d expect to pay eye watering fees or be unapproved. Because you’re selling an invoice, you don’t have to put up additional collateral to secure the money. Until recently, factoring was one of the fastest ways to get access to funds to grow your business. The factoring company then collects the funds directly from your customers. In return, you get around 60-95% of your invoice amount paid into your bank account within a couple of weeks. If not, it’s a financial product where you sell your invoices to a factoring company for a fee. If you have limited cash flow or slow paying customers you’ve probably heard of invoice factoring.