Invoice financing, also known as accounts receivable financing, is a way for businesses to borrow money against outstanding invoices from their...
Invoice Financing — Top 10 FAQs on Crowdz
What is invoice financing? How does it work? What are the benefits and risks? Crowdz has made a Top 10 FAQ list about invoice financing. This will surely be useful for small businesses.
From selling your invoices on Crowdz to the Facebook Receivables Financing Program—here’s what you really wanted to know.
For our latest list of top FAQs, we went straight to the source: You. Here’s what Crowdz users are emailing and live chatting our customer service team about most recently. It’s a mix of cash flow, platform, auction, and, of course, invoice questions. Chances are you’ve been wondering about them too.
No. 1: How does the invoice auction program work?
Through the invoice marketplace, Crowdz directs competitive and low-cost financing opportunities to small and medium businesses (SMBs) in global supply chains. The easy explanation is that we help SMBs sell their unpaid invoices for fast cash. Think of it as next-level invoice financing. SMBs have three options for getting started: create a new invoice on the platform, upload an outstanding invoice, or sync an existing accounting system like Xero or Sage. Once added, an invoice gets posted to the marketplace, and funders can begin bidding. SMBs that use Crowdz enjoy the added perk of our SuRF score, which stands for Sustainability, Risk, and Financial Score. This unique tool allows us to risk profile sellers, invoices, and buyers. Why is this important for sellers? The better the score, the better the chances are for sellers to get lower discount rates. SuRF scores also change in real time, making it easy for sellers to boost their scores with timely payments.
No. 2: Can invoice financing actually help my business get ahead?
Definitely. In fact, it’s one of the easiest ways to make your untapped cash work harder. By leveraging unpaid invoices as new sources of immediate cash, sellers avoid the wait time and the inevitable chase that comes with lengthy net terms. Not only does the influx help SMBs take control of day-to day-expenses (like payroll), but it creates new opportunities for strategic growth, team hires, bigger clients, and much more.
No. 3: Where do I sell my invoices?
You’ll be able to upload invoices to our platform and post them on our public auction in any format, from anywhere. The first step is to select the Invoices tab on the left of your seller’s dashboard. Next, choose to upload, create, or sync unpaid invoices to sell (the quantity is up to you). FYI, every step—from invoice details to uploads and closing dates—can be reviewed and verified before posting for sale. Ready to stop chasing payments and start selling unpaid invoices? Sign up to create a business account on Crowdz here.
No. 4: What’s the rate for invoices?
Our mission is to help small businesses survive and thrive. To that end, our rates are significantly lower than traditional invoice financing or factoring companies. The Crowdz marketplace typically yields rates between 2%–5%. Keep in mind that because a seller’s SuRF score can influence bids, these percentages can vary. Sellers always have the option of waiting until the end of an auction term window to scope out the competition and accept an offer.
No. 5: Are past due invoices accepted?
We’re sorry to tell you this, but unfortunately, the Crowdz invoice marketplace does not allow sellers to post past due invoices at this time.
No. 6: I uploaded invoices—what’s next?
Congrats! To verify your invoice was successfully posted, select the Invoices tab on the seller dashboard. Your latest invoice should appear immediately after uploading. If you would like to submit the uploaded invoice to our marketplace, head over to the Action column and click on Post For Sale. A form will appear. Under Type Of Sale, you’ll want to choose Public Auction to allow multiple funders to bid on the invoice. Next, set your closing date and time as well as your preferred maximum discount for the invoice. When you are satisfied with all of the input information, click Post for Sale. You can double-check that your invoice was successfully submitted in the Auction tab of your dashboard.
No. 7: How long is the approval process?
No two sellers (or their invoices) are the same. So, approval times are determined on a company-by-company basis. A long-standing company that’s correctly inputted their details on the platform and has an excellent SuRF score can naturally expect a shorter approval time than a company with incomplete or incorrect information.
No. 8: My company is outside of America—is that okay?
Yes! Crowdz’s marketplace is open to international suppliers. Our goal is to help as many small and medium businesses grow, thrive, and strengthen today’s global economy.
No. 9: What communication does Crowdz have with a seller’s customers?
We understand your concern, but don’t worry! Crowdz will never communicate with your customers or notify them about your participation in the program. After all, you know your customers best, so what and how much they know is entirely your call.
No. 10: How is the Crowdz marketplace different from the Facebook Receivables Financing Program (FRFP)?
Great question. Crowdz joined forces with Facebook to launch a receivables program in response to the economic recovery facing small and medium-sized businesses today. While both programs aim to help eligible suppliers improve cash flow, those participating in the FRFP must be headquartered in the US and have been paid directly by Facebook in 2019 or later. It’s also worth noting that the Facebook Receivables Financing Program serves diverse-owned businesses in addition to SMBs. Head over to Facebook for more information on the program.
Have a burning question that didn’t make it on this post? Shoot an email over to email@example.com for some friendly expert advice.