Invoices.Finance
By TradeDigitization.com
Featuring Regional Trade Clusters
Of Manufacturers and Suppliers
Invoices Finance by sale of Receivables
For Purchase by Institutional and other Lenders
GLOSSARY
Marketplaces.Trade is operated by TradeDigitization.com, as a co-operation with TradeKey. It serves Trade Clusters on the TradeClusters.com Platform which is also operated by TradeDigitization.com
TradeDigitization.com is an IBM Partner Programme, and comprises of TRADE GATEWAYS and e-Debit.
TRADE GATEWAYS is a network of over 300 Digital Trade Gateways that utilize Marketplaces.Trade to source products across the Trade Gateways.
e-Debit is a platform used to facilitate Invoices Finance through major providers. Invoices.Finance is the feature of e-Debit that facilitates the invoices finance ecosystem for participating manufacturers and suppliers
TradeKey is the worlds largest B2B Marketplace.
Provision of a Trade Receivables Market
The Web-3 Protocol has been initiated by TradeDigitization.com. The Web-3 Protocol provides the benefits of Web 3 (the Internet of Value) to conventional Web 2 sites. The Web-3 Protocol has been designed to help with transitions.
e-Debit uses its Invoices.Finance Programme to generate Smart contracts generating Receivables, the sale of which to Institutional Buyers, help with the Provision of Invoices and Trade Finance for Trade, which might otherwise not be available, especially to SMEs.
Digitized Solutions Provided by Invoices.Finance
With Invoices.Finance, buyers are identified across the TRADE GATEWAYS Network. Invoices.Finance defines a credit line for each buyer who act as the final covenant. This means that SMEs can access Invoices Finance where they might now otherwise have been able to do so, supporting their ability to grow.
Invoices.Finance is a reliable way to deal with trade credit risk and avoid cash flow issues. If a business has a turnover of £1m on 60-day payment terms, they're going to have more than £150,000 tied up in invoices they can't get their hands on.
Invoices.Finance helps companies to generate the cash to deploy where they most need it.
About The Web-3 Protocol
The Web-3 Protocol has been initiated by TradeDigitization.com, which is an IBM Partner Programme.
The Web-3 Protocol has been designed to help with a transition to Web 3.
TradeDigitization.com comprises of TRADE GATEWAYS and e-Debit. These, along with the GTIN Token, are components of the Web-3 Protocol, and are designed to assist with a Web 3 transition
Web 2, the social web, brought us user-generated content, social media platforms, and interactive websites.
However, Web 3 takes the Internet to a new level by introducing decentralized web platforms, blockchain technology, and advanced user experiences.
While being an exciting opportunity, the transition to Web 3 presents challenges.
For that reason, TradeDigitization.com has launched the Web-3 Protocol as a halfway house that assists the transition.
Quotes From Partners in the Parent TradeDigitization.com Programme
"Exciting Opportunity"
From TradeKey - The World's Largest B2B Marketplace
"We are looking forward to building a thriving partnership!"
From IBM - Global Leader in Blockchain , the cornerstone of Trade Digitization
What is Invoices Finance?
Invoices Finance can be considered a business financing option as businesses can collect cash immediately without waiting for customers pay you in full.
That, in turn, keeps working capital topped up and can avoid the credit and cash flow problems that can occur when customers take a long time to pay.
So it’s one way to finance slow-paying accounts receivable or to meet short-term business liquidity needs.
The Traditional Invoices Finance process
You provide the goods/services for your customers and immediately invoice.
You send those invoice details to the Invoices Finance Provider (the lender).
Receive a percentage of the face value of the invoice, usually within 48 hours
You collect payment from your customers as usual.
When your customers pay you, you settle your account: reimbursing the lender and retaining the portion of the invoice that wasn’t part of the Financing.
The lender will charge interest on the amount you borrow, as well as fees.
In addition, businesses are responsible for collecting the invoices due from customers.
Problems for SMEs regarding Invoices Finance
Changes in banking regulations being implemented in Basel III and Basel IV has increased funding costs and made banks less willing to extend loans, particularly to SMEs with below- average creditworthiness.
SME Invoices Finance is one of the non-banking funding sources which are filling the need for capital for smaller businesses or new businesses without a long track record.
Advantages of Invoices.Finance by TradeDigitization.com
Primary advantages of Invoices.Finance by TradeDigitization.com over traditional invoice finance methods include greater transparency, which lowers risk, as well as faster transactions, which increases volumes.
The combination of reduced risk and greater volumes can lower costs to companies and invoice finance providers alike.
Invoices.Finance is a form of Invoices Factoring provided via TradeDigitization.com, where the Lender not only advances cash against invoices, but also takes on responsibility for collecting payment.
Problems with Conventional Paper Based Systems
One of the difficulties involved with conventional invoices and trade finance is the large volume of paper documents that make up much of the information flow between trading parties.
Most of the trade finance activities involve a substantial amount of physical paperwork being shuffled back and forth between the importer, exporter, importer’s bank, exporter’s bank, shipping company, receiving company, local shippers, insurers, etc.
This reliance on documents usually has drawbacks, including the cost and time required to prepare, transmit, and check these documents. Paper documents may also be open to errors and even forgery.
Purchase of The Smart Contract By a Lender as a Trade Receivable
The smart contact for the transaction is a Trade Receivable that is purchased by the Lender who advances funds that provides the Invoices Finance and receives payment from the Buyer.
The smart contract is assigned to the Lender and payment discharge obligations in respect of the smart contract is made to the Lender by the Buyer
Upon release of funds to the seller, fulfilment is carried out by the Delivery/Fulfilment company as below.
Delivery/Fulfilment Process
1. The Invoices.Finance solution allows companies to use XML to notify an ASN (Advanced Shipment Notification) to the warehouse prior to delivery.
2. The warehouse receives the goods against the ASN to check for damage and any discrepancies.
3. Warehouse issues a warehouse receipt
4. The goods are then allocated to locations within the warehouse.
5. The warehouse receipt is then digitally signed from the verified ID of the Distributor, along with other relevant trade documentation.
6. After the transaction is verified payment is made.
7. Transfer of title to the goods, is then effected and the goods are dispatched by the warehouse/fulfilment company.
How does Invoices.Finance work?
With Invoices.Finance, the lender utilizes unpaid invoices and the smart contract for the payment of those invoices as the security for funding, giving fast access to part of the invoice’s value.
Payment will be made within 48 hours of the submission of the invoice. The sum received may vary from 75% to 95% of the invoice value. You effectively sell the smart contract.
Customers post their payments into the smart contract. The customer assumes they are paying the business. Once the loan is repaid, the smart contract deducts interest and fees, and the balance is then transferred to the business bank account. As delivery of phygitized products is instantaneous, signoff too for Invoices.Finance can also be almost instantaneous, making for much faster transaction times and payments.
In simple terms, Invoices.Finance functions in the same way as a revolving credit line or a series of short-term bank loans. However, unlike those types of lending, with Invoices Finance, the borrower usually has no need to provide assets as collateral, nor are the owners or directors required to supply a personal guarantee.
The security is the covenant of the buyers and the smart contract for payment is sold to the buyer.
With Invoices.Finance invoice factoring, the company sells the smart contract to a third-party lender
Payment of Shipping and Distribution Costs
Upon payment into the smart contract, Shipping and Distribution Costs are paid immediately from the smart contract proceeds meaning that the SME does not need to pay these costs upfront.
Shipment/Delivery/Fulfilment is then carried out by the Shipper/Distributor on behalf of the Lender so that the contract can be fulfilled and payment made on the due date.
E: contact@tradegateways.com