Facevalue Tool ‘Challenges Traditional Factoring’

Dutch FinTech Facevalue has launched an accounts receivable finance tool for small to medium-sized enterprises (SMEs) in Europe that “challenges traditional factoring,” it said.

Read more: Facevalue Launches Pan European Online Factoring Solution For SMEs

“Most factoring solutions to SMEs require that the business sell all their outstanding accounts receivables to the Financier for a fixed period, usually two years that includes high fixed costs,” the company said in a news release Monday.

By contrast, their tool “offers complete flexibility” to clients to decide which receivables they want to sell while charging no fixed fees.

Facevalue says this is happening at a time where the banking landscape presents a challenge for small businesses seeking lenders.

“Facevalue has built a secure online platform that extracts invoice data, handle the mapping and conversion of data formats and lists all our clients’ outstanding accounts receivables in a ledger from where they can configure rules, or choose manually which receivables they would like to sell immediately and without recourse,” CEO Neels Bornman said.

The company said it can act as a “trusted market platform between businesses and investors,” having developed the ability to address the needs of companies seeking to use accounts receivable finance as that method grows in popularity.

Facevalue cites data from industry group FCI which shows accounts receivable finance has grown at an annual compounded growth rate of 7 percent over the last twenty years, growing from €600 billion ($712.5 billion) to €2.7 trillion ($3.2 trillion) today.

In an interview with PYMNTS last year, Brian Reaves, CEO of Amsterdam-based Factris, said small and medium-sized (SMB) financing offers a lifeline for European small businesses.

Read more: FinTechs See SMB Factoring As Ripe For Disruption

“I see receivables and invoices as being a really great asset class,” Reaves told PYMNTS. “When you have a receivable, the receivable is very liquid — and it’s insurable.”

But Facevalue said in their release that many businesses are hesitant to use account receivable financing “due to the comparatively high fixed costs it attracts.”

The company said it removes fixed costs, giving clients a solution that fits their strategic plans, no matter the company size.

To sell a receivable, clients need only to email an invoice from an accounting system to a dedicated email created by Facevalue. New clients can sell their top priority receivables immediately while Facevalue conducts a credit assessment, “whereafter a facility of up to €5 million can be approved for SMEs across the European Economic Area and the United Kingdom,” the company said.