Why Choose Mynd Fintech for Factoring?

Factoring invoices can provide a much-needed boost to your cash flow and help grow your business. The abundance of options available can make finding the best fit difficult. Mynd Fintech is a standout in the industry, offering a unique combination of technology and expertise to make the factoring process easy, efficient, and stress-free. In this blog, we’ll explore the top reasons why you should choose Mynd Fintech for factoring.

Let’s understand the meaning of Factoring in detail

Factoring is a financial transaction in which a business sells its outstanding invoices to a third party (called a factor) at a discount in exchange for immediate cash. Factoring typically involves three parties – a client, a factor, and a debtor. In the process of factoring, a client is a firm that sells its receivables. A factor is a financial institution that offers finance to a client (in exchange for receivables). Such transfer is generally made at a discount rate and the firm is provided with instant cash for financing its ongoing business. The debtor is the party who owes the trade debt. That’s why it ends up paying the factor instead of the original business.

About Factoring Services in India

Since the inception of factoring, businesses have made significant progress in India. The total factoring volume has increased drastically in the past 10 years. Here in India, factoring is a financial package that combines export working capital financing, credit protection, receivable bookkeeping, and collection services.

How Factoring Can Help Small Businesses in India Grow?

Micro and small & medium enterprises are the backbones of the Indian economy. But they persistently face payment delays from large clients. Now with Factoring Regulation (Amendment) Bill, 2021, the legislation aims at helping the Micro, Small, and Medium Enterprises (MSME) sector. The bill enhances enhance traction on the TReDS platform which was introduced by the Reserve Bank of India in the year 2014. This move is taken in favour of small entrepreneurs so that they can unlock working capital which is tied to their unpaid invoices.

Why Choose Mynd Fintech’s Factoring Services?

Have you supplied goods or services to a reputed buyer as per agreed timelines, but do you fear that your buyer pays you only after a certain time period? Here at Mynd Fintech Factoring, we help you unlock these receivables by assigning them to an appropriate financier through a factoring process that allows early liquidity and improves your cash cycle.

Here are the reasons why you must choose Fintech’s Factoring Services:

*Unsecured line of credit offered to the sellers for sale

*Avoids loan agreement

*Technology integration with Corporate ERP

*Flexible repayment terms of upto 120 days of an invoice

*Limits of upto INR 100 crores per corporate and INR 20 crores per buyer

*Easy to scale-up

How Mynd Fintech’s Factoring Works?

At Mynd, our finance professionals make the factoring process quite simple. It is structured through the sale of your invoices to a factoring company. 

It includes the following steps:

1. One-time credit limit set-up: Limit amount and credit period finalized basis risk assessment of buyer. One-time notice of assignment is signed by the seller and accepted by the seller.

2. Digital flow of buyer-confirmed invoices: At this step, integration with the Corporate’s ERP for online invoice flow takes place. A system is followed for uploading digitally signed invoices if ERP integration is unavailable.

3. Online disbursement: The buyer confirms invoices funded within 24 hours and then the disbursement takes place in the seller’s designated bank account. The limit is revised post each disbursement.

4. Online repayment before the due date: Limits get replenished after every payment and there is flexibility for the anchor to pay the lender anytime prior to the due date.

Why Mynd Fintech’s Factoring is Different From Others?

Our experts strive to streamline the entire Factoring process for lenders, sellers, and buyers. The financing disbursement is done by the lender to the designated bank account of the seller within 24 hours, as per the agreed process. Repayment is made by the buyer to the respective lender before the end of the credit period. The credit period usually ranges between 30 to 120 days, as per the agreed terms with the buyer.

Conclusion

Several companies face cash constraints when they don’t have access to traditional bank loans due to slow-paying company customers. Now, with Mynd factoring solutions, we use companies’ unpaid invoices to raise working capital and fulfill their financial needs.

So, want to implement smooth and efficient processes for your financing needs through factoring, contact us today!

FAQs

Q1. What is the maximum duration of Mynd Fintech’s factoring invoice repayment terms?

Ans. The maximum duration of Mynd Fintech’s factoring invoice repayment term is of upto 120 days of an invoice.

Q2. What is the maximum limit per corporate and per buyer for factoring with Mynd Fintech?

Ans. The maximum limit per corporate is up to INR 100 crores and upto INR 5 crores per vendor.

Q3. What are the benefits of factoring for lenders, sellers, and buyers?

Ans. Factoring allows lenders to access new and profitable lending opportunities with little or no investment. It also enables off-balance sheet funding for sellers. Factoring also helps maintain a healthier supply chain for buyers and an additional lever to negotiate down procurement prices.

Q4. What is the meaning of invoice discounting?

Ans. Through the technique of invoice discounting, a company can use its accounts receivable to get finance for immediate needs. Invoice discounting companies work far more quickly than banks.

Q5. What is receivable factoring?

Ans. With factoring receivables, we help finance companies who are struggling with limited cash flow. In this process, a larger company buys a business’s unpaid invoices for cash advances.  Further, it helps receive any outstanding payments it’s owed, for which the other company charges a factoring fee.