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TYPES OF INVOICE FINANCE: HOW TO GET THE FUNDS YOU NEED

Invoice finance can be an excellent option for you if you’re a business owner who frequently finds yourself waiting weeks or even months for payment from your clients.

By utilizing their outstanding invoices as security, businesses can use this sort of financing to acquire the cash they require right away. Before choosing an invoice finance option, it’s critical to comprehend the differences between the many types available.

In this blog article, we’ll go through the three most popular types of invoice financing—factoring, discounting, and asset-based lending—in depth. We’ll also go over some crucial advice on how to pick the right invoice finance provider for your requirements.

What is invoice finance and what does it do?

If you’ve ever wondered what invoice finance is, the explanation is straightforward: Small business entrepreneurs can utilize invoice finance as a form of short-term loan to receive cash quickly. You can borrow money against the value of the invoices you send to consumers. A percentage of the total invoice amount, often between 70% and 80%, will be provided by the lender. The loan, along with fees and interest, must then be repaid over a period of time, typically between 30 and 60 days.

For small firms, invoice financing has a number of advantages.

First of all, it gives business owners a means to get cash right away without having to wait for their clients to pay their invoices. This can be useful if you need money to pay for significant expenses or if you’re having trouble managing your cash flow. Second, by providing you with the funds required to make timely bill payments, invoice financing can help you avoid client late payments. Finally, offering a reliable finance source can assist you in improving your cash flow and establishing corporate credit.

Three most common types of invoice finance:

Factoring – what is it and how does it work?

When a business sells its accounts receivable—the money its clients owe it—to a third party, this is known as factoring. The third party then assumes ownership of the receivables and is in charge of obtaining payment from the clients.

The company that sells its accounts receivable receives a quick infusion of cash that it can use to pay its creditors, grow its business, or invest in brand-new goods or services. Additionally, the third party takes on the risk of failing to obtain payment from the clients, so the company should not be concerned about bad debt.

Discounting – what is it and how does it work?

Businesses can borrow money by using the value of their unpaid invoices as collateral through the invoice finance method known as discounting. Businesses that have a lot of cash locked up in their accounts receivable might benefit greatly from this sort of financing because it allows them to access that money right away.

The operation is rather straightforward. Following approval for a discounting facility, a company will give the lender a list of its unpaid bills. The lender will then make an advance equal to a portion of the invoice’s total value, less any fees and interest. Following the final payment of the invoice by the client, the lender will send the money to the firm, less any applicable charges and interest.

Asset-based lending – what is it and how does it work?

In an asset-based loan arrangement, a company borrows money by using its assets as security. Accounts receivables are the most typical asset class utilized as collateral, but other assets including inventory, machinery, and real estate are also acceptable.

Asset-based financing has the benefit of being significantly simpler to obtain authorization for than conventional loans. This is so that the lender can rely on the value of the pledged assets rather than the borrower’s credit history or predicted future revenues. Additionally, it is frequently less expensive than typical loans because the interest rate is determined by the usage of such assets as security.

Tips for choosing the best invoice finance provider for your needs?

There are a few considerations you should make when selecting an invoice finance company. You must first and foremost confirm that the service is reputable and has a successful track record. There are many new service providers out there, but they might not be qualified or experienced to deliver high-quality care.

The second thing you need to check is whether the company is charging acceptable costs. You need to be careful not to overpay for invoice financing because it might be pricey. Make sure you’re receiving a decent deal by comparing prices from several providers.

Finally, you must confirm that the service supplier delivers excellent customer support. This is crucial because you need to be able to contact someone who can assist you if there are any issues with your account.

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thefintech.info

HOW BANKING APPS CAN GET FIVE STAR REVIEWS WITH AIOPS ?

The banking sector was in a turnaround even before the downturn threw a shadow over the financial markets. Neobanks were altering the competitive landscape for regulated banks, and the pandemic pushed quick adoption by the “on-the-go” consumer who was expecting more from safe mobile banking applications. The core of banks’ IT departments, which were attempting to keep up with the rapidly changing banking industry, was being shaken by these trends.

To find out how they are prioritizing technology adoption, Forrester surveyed banking leaders (paywalls). The results were not that unexpected. Top on the list is 5G, microservices architecture, natural language processing, artificial intelligence, and machine learning. It was intended to achieve a delicate balance between encouraging experience and producing income while limiting costs by increasing the interest of IT professionals in these technologies.

One-third of the participants were already utilizing AI to mine data from financial systems for insights. More than 30% of respondents said that ML was improving the consumer experience. In fact, these technologies’ insights were continually enabling banks to provide consumers with more individualized services and make better business decisions.

The transformation of customer-facing applications, maintaining availability, and achieving a high degree of performance must be coordinated with the management of the infrastructure and network supporting applications using these technologies. The banking industry is changing as a result of the use of AI, ML, and predictive analytics to service performance management, change management, and fault management.

As the majority of businesses begin utilizing 5G for low-latency communications, it is anticipated that it will become a general-purpose technology for the financial services industry. Moreover, half of the poll participants said that customer service was a key application for the technology, despite the fact that 5G infrastructure is only now starting to develop. Even the most experienced network management teams will find it difficult to handle 5G speeds and their complexity.

Management applications must rely on automation and high-level service management to deliver high availability and long-term performance as banks serve clients and adhere to regulatory regulations.

Automation & Service

A change in the way delivery infrastructure is planned, put into practice, and most crucially operated is required to enable smart banking applications—applications that integrate machine and human intelligence. Without major adjustments to cross-system monitoring, root cause analysis, and incident response, pivoting smart banking applications would be difficult. The expectation of “real-time” takes on a whole new meaning when you’re servicing a customer on a mobile device who is rushing to pay bills, transfer money, or check your account balance.

Automated operation requires changes to AIOps. There is only so much that can be done manually. The complexities of today’s network and application stacks have increased, at times, error-prone and time-consuming manual processes. Human intelligence working alone has limits that can be improved in the following ways.

• Experienced labor shortage persists – supercharged organizations are combining human and machine intelligence to fill the gap.

• Customers give “stars” to applications that are hassle-free and prevent downtime in a five-star production.

• Quick Average Time To Repair (MTTR) prevents a negative review if availability is restored quickly and without reboots.

Wide-scope AIOps provide the ability to simplify complexity. Organizations that have surpassed AIOps often report these five capabilities you’ll need to build a future operations center.

1. Defect and performance management in one solution.

2. Noise reduction from out-of-box algorithms, such as the default correlation algorithm.

3. Reliable automation incorporating digital fingerprinting and relevance scoring.

4. Custom Dashboard.

5. Ability to add new data sets in less than an hour.

Why these five? Implementing AIOps with the right features provides immediate and lasting benefits.

• A fast start and a foundation for continued success.

• Improved efficiency for all users of the AIOps platform.

• Increased trust in automation that can fail when users don’t trust it and its suggested responses to defects.

• Quick response to service interruptions.

When customers’ expectations are exceeded, they give five-star ratings. A new approach for controlling system and network performance and availability is needed for smart banking applications. When clients rate their banking experience, they are rating their provider’s capacity to understand their needs and consistently deliver on those needs. Modern businesses prioritize cutting-edge technologies like AI, ML, 5G, and NLP while using the comprehensive AIOps platform for service management to ensure five-star evaluations.

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thefintech.info

WHAT SHOULD 2022 BRING TO THE CRYPTO MARKET?

A day in the crypto market is often the equivalent of a week in real life, due to its volatile, unpredictable nature. So what could a whole new year bring to the big table?

Plenty of changes, we hope, as cryptocurrencies are now becoming mainstream. But their popularity doesn’t come without risks. The crypto market value blew past $3 trillion, according to CoinGecko pricing, but the scams are on the rise as well. In just 6 months, between October 2020 – March 2021, over 7,000 people lost more than $80millions by investing in altcoins according to The Federal Trade Commission (FTC). The amount was 10 times smaller than the previous year.

Despite its rapid growth and severe caveats, crypto transactions aren’t currently regulated by the Financial Conduct Authority (FCA) or covered by the Financial Services Compensation Scheme. This means that the industry is a minefield, full of unethical players. Under these circumstances, people should never invest more than they’re willing to lose.

This month, regulatory agencies issued a joint statement driven by the concern that ‘the emerging crypto-asset sector presents potential opportunities and risks for banking organizations, their customers, and the overall financial system.’ The Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) analyzed various issues regarding crypto assets and are aiming to provide coordinated and timely clarity. They believe that it’s necessary to use a common vocabulary, identify the key risks and analyze the applicability of existing regulations and guidance. This sets expectations for more consumer protection and a standard the whole industry can adhere to.

In addition to this, the OCC published a letter about how national banks and federal savings associations should implement safety measures before undertaking certain cryptocurrency and stablecoin activities. They suggested controls that include engaging with their supervisory office to show written notification of their proposed activities, alongside the criteria that the OCC will use for the evaluation, with a view to providing a supervisory non-objection.

All this progress is welcome, as at a macro level they’re meant to protect the interests of the investor. But the way things developed with the US Securities and Exchange Commission (SEC), which has the same goal, makes us want to take this with a pinch of salt.

On one hand, the SEC is looking after people’s money, but on the other, it wants to make the market more efficient. Catering for both is a challenging job, and some might say that it became too protective as an institution and got in the way of progress. See what happened to Basis, for example, designed to keep its price stable. This would have been an innovative solution for the crypto space, coming from a place of accountability and transparency. The project was however shut down because of strict, old regulations applied to a novel system. In its desire to go after scams, frauds, and manipulative activity, it discourages entrepreneurs from launching new projects. This is one of the reasons why London, not New York, is the center of fintech investments now.

With the industry’s rapid advancement there is a growing need for regulations that are agile and flexible. As the SEC might be directing its enforcement actions against DeFi, NFTs, and even stablecoins, revising its modus operandi is required sooner rather than later.

While policy-makers are slowly devising their roadmaps to a healthier ecosystem, the industry could regulate itself by relying on trust and knowledge. The harsh reality is that in the crypto space there are many bad actors. We believe there is little to no chance that there are retail investors out there who didn’t experience scams or at least somebody trying to scam them. For the retail investor to have more confidence in this space, there is a high need for a tracked record system for projects, influencers, and anyone with a voice in this space. We can’t trust someone with our investment decisions just because they have a big following. Retail investors shouldn’t base their confidence on that. It’s important to understand that a tracked record of past performance, immutably stored on the blockchain, is a step forward towards building the trust bridge in 2022.

The same trust and knowledge lie at the heart of Coreto, our reputation-based research hub, which is a secure environment for crypto communities. Here, members have to prove their influencer status by building a history of accurate analysis and market predictions. This will elevate critical thinking, reasoned argument, shared knowledge, and verifiable facts. Only when they’ll have a good enough reputation score will they be able to influence the newcomers, and also monetize their knowledge. This is significantly different from what happens currently online, with some so-called crypto influencers misleading the masses into faulty investments and then fleeing the scene. This creates a win-win situation: the goodwill influencers will be able to shine on a digital stage, while the community will be able to make more educated investment decisions.

If we all remain loyal to these guiding principles – trust and performance – the whole crypto community can benefit and evolve from them.

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thefintech.info

10 TIMELY INVESTMENT TRENDS EVERY INVESTOR SHOULD BE AWARE OF

Recently we have seen unprecedented movements in the financial markets. With the crypto crash and the recent stagnation of the stock markets, some have been left scrambling to recoup their losses.

Globally, Governments have been spending big on stimulus packages, and inflation has hit record numbers. We are living in unprecedented times, and we are heading into what experts agree is a highly unpredictable future for investors and businesses.

Yet, in times of the greatest crises lie major opportunities. Now is not the time to continue with the same investment strategies you had been doing prior to 2022. Here, we look at 10 key investment trends that every investor should know.

Dollar destruction

Due to the recent pandemic, 35% of all U.S. Dollars in existence have been printed in the last 10 months. But endlessly printing money does not help economies and creates further divide in the wealth gap.

With inflation soaring and money being worth less and less, banks around the world are predicting a recession towards the end of 2023 and early 2024. This recession is said to be worse than we have previously seen with things getting worse before we start to see any recovery.

To combat inflation there is actually very little a country can do other than printing more to make the physical currency more expensive to store and move. But by doing this interest rates increase, which can then in turn lower growth. These economic trends are currently playing out, with Deutsche Bank recently informing investors that they are expecting the worst recession in history to hit in late 2023.

The Age of Exponentials

At the beginning of Society 5.0, the imagination society is coming into play, where digital transformation and creativity from a diverse population will accelerate technological growth and adoption. Big data harvested by IoT and converted into a new type of intelligence by AI, will impact every corner of society and change our infrastructure for the better. People will see their lives become more comfortable and sustainable as they are provided with the products and services in real-time, as they need them. Investments will be focused on the future with any disruptive or innovative technology being lucrative.

The Meme Generation

As individuals using memes became viral it was then realized this pathway could lead to becoming an influencer which can be a lucrative job with some people becoming multi-millionaires from it. Meme investments using products or brands do a similar thing and are created to attract retail investors to invest in the company stocks and shares. This idea that a simple meme can create huge visibility for a brand is one that takes skill but can be worth the investment as it’s a quick way to get brands in front of a huge audience.

The DeFi economy

Historically we’ve used various different devices for different uses, think video cameras, cameras, CD players, and the radio. Now we have just one device – our phones to do everything. The same is happening with services, think taxi ranks that are now being replaced with Uber or Google replacing libraries. Everything is becoming streamlined and minimized. The same is happening with financial services where the decentralized system has fewer transaction points and middlemen. Ethereum could displace many traditional financial services and its native token Ether could compete as global money.

Stocks & Crypto Trading

Traditional currency is being taken away from the individual at source via taxes, bank charges, the rising costs of goods, and currency debasement. Investing in stocks and crypto can give you returns of around 5% to even 15% if you just have the strategies to invest wisely. When you then add money each month you may well see your profits grow via the power of compounding.

The Digital Decade

Everything that we do is being digitized and will encompass society 5.0.; in the digital decade, this will be apparent through a digital overlay on your day-to-day experience. The revenue from the virtual world could approach $400 Billion by 2025. Global gaming and AR and VR markets will drive this growth. Investing in these areas or companies that are implementing these technologies is a good idea as they are likely to see huge growth over the next few years.

The Rise of Robots

Automation will empower humans and increase productivity and wage growth. It has the potential to shift unpaid labour to paid labour and Cathie Wood, CEO of Ark Invest believes that automation will add 5% or $1.2 trillion to US GDP over the next 5 years. The metaverse and the gaming industry are driving the change of automation. AI and ML will help this change happen as we will see automation get smarter and take on volumes of information that would take humans much longer. We will see companies using AIs as their CEOs and they will be making better and smarter decisions.

Genius Generation

Entrepreneurship will become a vocation and will be taught in school and as a preferred option for employment by 2025. This is what Genius Group believes and is forecasting for the industry.  Edtech will continue to improve people’s skills, wealth, and life chances with more education available to a wider demographic. The UN sustainable development goals will be met by people and companies who have invested in themselves and in the future.

Wholesale Investing

By teaming up with other like-minded groups or collaborators, investors can access a vast new area of wholesale investing. As with purchasing wholesale, the price is usually cheaper as you are buying in bulk, and you are able to find market opportunities that wouldn’t usually be open to an individual.

If you take the idea of retail or the stock market, you are buying at price, whereas when you team up with others there are new offers that are available to you. Using the power of the crowd you become an insider rather than an outsider.

Time for Impact

Buying property has always been a popular investment and given that the population is growing, and property won’t ever go to zero, banks are happy to lend. When growing a property portfolio, you can make infinite ROI by releasing money as the property increases in value, which leads to a tax-free cash-back to invest in the next property.

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thefintech.info

HOW TO FINANCE YOUR NEXT BIG TECH PURCHASE?

You might face problems funding your new gadget needs. The more sophisticated the device, the bigger the price tag. Here are five financing ideas to consider before adding to your credit card debt.

Sell your old device

If you’re going to buy a new device you might as well profit from getting rid of the old one. Put that revenue towards your new purchase. Take some time to research viable markets and get the best deal.

Look at generic buy-and-sell sites (e.g. Craigslist), social media groups (e.g. Facebook Marketplace), tech-centric online retailers, and official company websites. Plenty of people are looking to save by buying used, so if your device is in good condition you can get a significant amount of cash for it.

Likewise, companies and brand stores often offer incentives to customers who want to upgrade. You can turn in your old device and receive money, credit, or loyalty program points for buying a new model of the same brand.

Trading in at official stores can go a long way, but if you want something of a completely different brand or type you might prefer cash in hand to add to your funds. Compare the various offers and see what will get you the most value.

Look for cheaper alternatives

“Cheap” doesn’t necessarily mean “low quality”. This is especially true for tech that gets rapidly upgraded and has new models hitting the shelves at a steady pace.

A good example is household tech, like smart doorbells. Look into refurbished second-hand devices. These have been thoroughly vetted, worked, and polished into a good-as-new condition. You might miss out on the latest bells and whistles, but you’ll get a reliable device that’s already been checked by savvy users, and at discount rates.

Refurbished tech can be found with independent online retailers or in some licensed tech shops. In both cases, you want assurance that the device has been inspected for functionality and safety. In stores, look for a “factory-certified” or “manufacturer-certified” label. Online, rely on customers’ reviews of the seller and their products. If you’re tech-savvy yourself, you can ask detailed questions about their refurbishment process to make sure they handled it right.

Consider a personal loan

A tech purchase can be financed by a loan just like a vehicle, house, or education. In fact, a personal loan can be used for just about any purpose. Taking one out for a device purchase isn’t even that uncommon. Some common examples include work computers, home entertainment centers, and smart home devices.

The best loan for a tech purchase would be one from an accommodating private lender. You want to have flexibility in your fees, rates, and repayment schedule. Most lenders nowadays offer online applications. This is great for urgent purchases when you need quick approval. Apply for a personal loan online if you need a new device for work, medical, or safety reasons.

Purchase a previous model

As opposed to work or safety devices, personal tech can afford to be a tad behind. If you’re looking to buy a new smartphone, give the previous models a chance. Most big brands release a new phone annually, and they tend to have all the same features with a slightly different look.

Take some time to compare the specs of the latest models and their immediate predecessors. Even if it’s all Greek to you, a quick Google search will tell you what’s what. Choose a device from last year and get the same functionality for a lot less money. Set the spare funds aside for future upgrades.

Look into promotional purchases and store financing

If you use credit cards, keep an eye out for promotions. Sometimes you can make a purchase with zero interest, but only within a limited time. Use those opportunities for large expenses, e.g. big-screen TVs, gaming computers, major equipment, etc.

Keep an eye on the repayment conditions. Pay off the balance completely before the promotion expires to avoid incurring interest or late fees.

Also, inquire with tech stores if they offer to finance large purchases. Some offer low or null interest rates. The counterweight is strict repayment conditions and heavier late fees.

To recap, you can finance big tech purchases in a few different ways. You could sell your old device, opt for cheaper and/or older models, take out a flexible personal loan, or take advantage of store financing and credit card promotions for low to zero interest.

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5 FINTECH FUNDING ROUNDS IN THE EUROPEAN REGION IN JUNE 2022

FinTech refers to software and other modern technologies used by businesses that provide automated and improved financial services. FinTech in our daily life is Mobile Payment apps, Cryptocurrency, and Blockchain like Bitcoin and Gemini. In the future, the range of FinTech services is predicted to transform the market even more with A.I. and machine learning and will make FinTech products an integral part of our digitalized life.

FinTech refers to the synergy between finance and technology, which enhances business operations and delivers financial services. FinTech can take the form of software, a service, or a business that provides technologically advanced ways to make financial processes more efficient by disrupting traditional methods.

Studies have shown that the COVID-19 pandemic has adversely affected the FinTech ecosystem. The number of FinTech deals has taken a hit as investors choose mature companies over early-stage deals to put their money in.

The following are 5 FinTech funding rounds in the European region in June 2022:

  • SumUp

SumUp, the financial partner for over 4 million small businesses worldwide, has raised a €590 million funding round that gives the company an enterprise value of €8 billion following a decade of rapid growth and global expansion. The round was led by Bain Capital Tech Opportunities, with participation from funds managed by BlackRock, btov Partners, Centerbridge, Crestline, Fin Capital, and Sentinel Dome Partners, among others. This latest round is a combination of debt and equity and brings SumUp’s total capital raised to €1.5 billion.

  • Juni

Juni announces the close of its $206 million in Series B and ventures debt funding within two years of its inception. The $100 million Series B funding is led by Mubadala Capital, whose global FinTech footprint includes investments in SpotOn, Brex, C2FO, WeFox, Cardless, and others. Juni’s existing investors EQT Ventures, Felix Capital, Cherry Ventures, and Partners of DST Global are also participating in the round.

  • Metropolis Technologies

Metropolis Technologies, the mobility commerce platform powered by advanced computer vision and a proprietary machine learning system, announced a $167 million Series B capitalization. 3L Capital and Assembly Ventures co-led the round, with participation from leading growth equity investors Dragoneer Investment Group, Eldridge, Silver Lake Waterman, and UP Partners, among others.

  • Zilch

Zilch, the London-based double unicorn, announced it had secured an additional $50 million in funding, taking the total raise for its Series C to $160 million. The extension brings Zilch’s total funding to more than $460 million in debt and equity and sees the FinTech company maintain its valuation.

  • Laminar

Laminar, a public cloud data security provider, announced that it had raised an additional $30 million, nearly doubling its funding to $67 million in less than six months on the significant demand for its solutions. The additional funding, with participation from Tiger Global Management and Salesforce Ventures, follows seed and initial Series A investments of $37 million in November 2021.

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COMMON SENSE IN AN ERA OF EXCESS 3-31-2022

Learn where the markets have been in excess before including the Dotcom Bubble (1998 – 2000), The Great Financial Crisis (2007 – 2009), and Today’s Speculative Mania (2020 – ?). We will also be looking into where common sense falls into place during a time of market excess based on previous market information and statistics.

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