Invoice financing in Singapore is a financial arrangement that allows businesses to access cash quickly by using their unpaid invoices as collateral. This form of financing is designed to help companies improve their cash flow by receiving an advance on outstanding invoices from a bank or a financial institution.  It enables businesses to convert their accounts receivable into working capital, allowing them to operate more efficiently and seize growth opportunities without waiting for customers to settle their invoices.

Upon submission of the invoices, the invoice financing provider advances a significant portion of the invoice’s total value to the business, ranging between 70-90% of the invoice amount. This advance is usually made within a short period of 1 – 3 business days.

The remaining balance, minus the financing fees, is paid to the business once the customer pays the invoice in full. The financing fees typically cover the cost of providing the advance and are deducted from the final amount.

Invoice financing can be done confidentially, allowing businesses to maintain their customer relationships without the customer’s knowledge of the financing arrangement. This is known as “non-notified” invoice financing.