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ABN Amro moves into invoice financing

Source: ABN Amro

Many businesses are having to wait longer for payments from other companies because of the coronavirus crisis.

More than half say they are unable to pay invoices on time. ABN AMRO is offering a new service that can solve this problem and can also help companies that need extra liquidity to grow.

Interesting service for small businesses and startups

Starting this month, business owners can use the ABN AMRO internet banking environment to select and assign individual invoices to ABN AMRO. If an invoice is selected, 90% of the invoice amount will be credited to the business’ account within one day of the invoice being approved. The remaining 10% follows when the debtor has paid the invoice. The business owner pays an average fee of 2.4% per invoice and the rest of the debt collection process is taken care of for them. The maximum fee is 4%. The flexible new service is especially interesting for startups and small businesses, as factoring solutions or loans are often less suitable for their cashflow management.

Patrick Pfaff of ABN AMRO’s Commercial Banking Management Team: “The advantage of the Snel Betaald solution is that businesses can decide on a per-invoice basis and at a transparent fee whether they need advance financing. This puts them firmly in the driver’s seat in terms of their cashflow position.”

Lengthening delays

Since the start of the pandemic, the number of businesses failing to pay invoices on time has strongly increased. Credit insurer Atradius calculated in November 2020 that 56% of businesses are paying invoices late, compared to 32% before the crisis. On average, the time to payment was 25 days longer at that point. In April this year, the small business index showed that 51% of small businesses aren’t paying their bills on time.
Fast-growing businesses

The new service is also useful in other situations, such as for fast-growing companies. Instead of taking out a loan, fast growers can use this immediate payment system to finance themselves with their own money. Patrick Pfaff: “One participant in the pilot phase of Snel Betaald was a delivery company that grew from 1 to 12 delivery vans in 8 months. With the payments due from customers coming in immediately, the business was able to finance the purchase of the vans with its own money.”

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