There are multiple companies that serve Germany's factory market which pushes upwards of 200 billion Euros in transactions every year. Below is a short list of companies that we believe are some of the key players that would best serve your german business. Remember that in order to work with any of these companies you must have a German registered company and address.

• Bezahlt.de: These are freelancer and self-employed specialists being one of the fastest growing invoice factoring in Germany startups. Setup time is only 5 minutes and you do all of it online: upload your invoice and get paid in 24 hours or less.
• Compeon.de: This is a finance portal for german small companies also known as Mittelstand and with 220 finance partners to choose from, they could be a great option for your invoice factoring in Germany.
• Flexpayment.de: This is a factoring specialist that claims to be easy, fast and secure way for invoice factoring in Germany, with a list of advantages such as high flexibility, low fees and insurance against loss.
• Decimo.de: Decimo is the freelancer and self-employed invoice factoring for Germans. They also work with small and medium companies and have free online registration and claim to prove you with liquidity in 24 hours. Decimo has simple signup with minimum paperwork and no contract.
• Innolend.de: This is a startup in the market of invoice factoring in Germany. They have low fees, 5 minute registration and the payout is in 24 hours. Also, without a binding contract you can cancel your factoring deal with them at anytime.
• Svea.com: Svea is one of the more experience players in this market and offers invoice factoring in Germany as well as debt-collection services for companies. Their invoice factoring offer is flexible, tailored to your business needs however large or small.

As mentioned earlier, invoice factoring is a good option for businesses seeking working capital and as long as you have invoices that fall within criteria you should be able to work with a factor. Even if you are a startup, it is possible to factor invoices. Below are the normal costs involved in factoring and although these can be a bit complicated to understand, most fall within the ranges stated as following:

• Amount available for borrowing: 10K or more per month
• Time to get approved: 2-8 days
• Time to receive cash payment: 1-3 business days
• Requirements for qualification: 90 day payable and free of liens of any type.
• Other qualifiers: B2B or government customers. No legal or tax problems. 2 years or more in business.
• Required documentation: Application with basic information (business & personal), accounts receivable "aging" report, account payable "aging" report, tax returns, incorporation documents
• Fee: .5 to 5%
• Advance: 80% of total
• Other fees: varies by factoring company

All factoring companies and lending offers are different with some specializing in working with invoices due in 90 to 120 days and other working in larger or smaller limits. If you require more information about a factoring partner, please contact us. If you are a B2B Pay client, you will not have to sign up again and application will be easier. Creating accounts is always free.

The minimum costs - excluding any additional fees - charged by a factoring company depends on the following:

• Discount rate (also known as factor rate): the discount rate is the main cost in invoice factoring and this is typically charged weekly or monthly. In this industry rates vary between .5 and 5% of the total invoice/month. Some invoice factoring companies tier down their discounts so the more you work with them the better deal you get with them.
• Length of factoring (the amount of time your customer takes to pay): since discount rates are charged in fixed intervals (typically every week or month), the amount of time that your customer takes to pay the invoice influences the final cost.

There are invoice factoring companies that charge hidden fees! It is important to read the fine print and do your research.

• Origination fees: all costs associated with opening an account and starting doing transactions. Sometimes companies charge upwards of 1000 euros.
• Incremental fees: If you have a flat fee deal with your factoring company, you may be charge a fee to increase the total discount as the invoice "ages". This can be between 0.3 to 1%.
• Service fee (lockbox fee): this is a fee charged to keep your money in a "lockbox" - that is- in a designated special account. It can be up to 500 per month.
• Unused line fee: If you do not take advantage of the credit line, they may charge you between 01 and .5%.
• Monthly minimum: there could be a minimum fee that you must pay every month, sometimes reaching upwards of 1000 euros.
• Service fee (lockbox fee): this is a fee charged to keep your money in a "lockbox" - that is- in a designated special account. It can be up to 500 per month.
• Collection or 'overdue fees": companies may charge you if your client does not pay in time and fees can be in the thousands.
• Wire fees: if you request to be paid via a wire transfer, factoring companies charge 15-50 euros.
• Credit check fee: fees vary, but whatever credit checks that will be required to be paid by you.

It is likely that you will pay some of these fees in one way or another and therefore it is important to get informed:

• Ask your factoring partner to give you a list breaking down all fees. Something simple and easy to read.
• Read the contract. Carefully. Get legal help if needed.
• Compare all proposals. Shopping around is important.

There are companies that are much easier to work with than others, so it is important to do your research and be well informed. Some have instructional videos and detailed information and well thought out customer onboarding processes that make the whole process rather easy. In some, you won't be required to run a credit check which means you are more likely to qualify quickly - sometimes in a few hours.

There are thousands of invoice factoring companies in the world, with a large variety of financing offers fit for all business types. It is important to be careful when choosing a company and here are a few pointers that will help you decide.

Customer contact with factoring company.

One important aspect of invoice factoring companies is the fear that invoice customers will get a lot of contact requests from them asking to pay their invoices and that hard earned business will be scared away. These concerns are real but they are largely exaggerated and need to be addressed.

Some factoring companies will want to talk directly with your customers in order to verify invoices and to make arrangements for payment. This is - however - only common in industries where factoring is itself common so business relationships tend to be preserved.

With some companies there are special arrangements where the factor has nearly zero (and in some cases zero) contact with customers. In some situations this is possible by opening a bank account that is controlled by the factoring company but it is listed as your company's account. This means that your customer will think they will be in touch with your billing department.

The time to get your hand on the funding

Sometimes getting the money fast is a much bigger priority to you if your immediate financial needs aren't being met such as in with payroll or other essentials.

The timeframe for you to get your hands on the money is similar to that of short term financing but it does vary between factoring companies. You may get qualified in as little as 2 days and get the money within the next 24 hours. Generally speaking this process takes up to 2 weeks.

There are companies that makes this process faster because they require less paperwork and their approval systems are electronic and money can be in your hands in a day. Get in touch with us to learn more.

Recourse vs non-recourse

This is a key concept that needs to be understood by anyone looking to choose between factoring companies: recourse versus non-recourse factoring. This is what determines what happens if customers are late with their payments.

In recourse factoring, the factoring company has complete rights to collect their payment from you if the customer does not pay in a reasonable timeframe. This of course can be a problem if you already used the funds received from the factoring company. This is why it is important to only factor those invoices stemming from customers that are good payers. It is important to know this because fees can pile up and created an additional problem.

Non-recourse is different. This is when the factoring company takes on itself the risk of non-payment customers. In such cases, your business will not be liable for the unpaid invoices. It is important to pay attention to the fine print in such cases because despite advertisements claiming non-recourse factoring there are numerous exceptions listed in the contract.

There are also partial-recourse contracts and in any case all forms of factoring contracts need to be signed with care so you know who is responsible for what when payments aren't fulfilled.

Spot versus contract factoring

Spot factoring means: single invoice assigned to a single factoring company. Although this might be the first choice by many companies, some prefer not to factor with this method. Because the application and underwriting processes aren't too different, some view as being easier - and more profitable - to factor all of your invoices.

Contract factoring is much more common because it has minimum monthly requirements or that all invoices coming from a single customer must be invoiced. In general, this is something you must be aware of because long term contracts can be a cash pit and you must thread this waters with care. In other words, you may get better rates but gone is the flexibility because you have no way to choose the who/when/how of the factoring according to the ever changing financial scenario of a business.

Familiarity with the industry

Sometimes, understanding the underpinnings of your specific industry is a key component of what factoring company is best for you. Therefore it is important to take into consideration if the company has experience working with your industry specially if it specialises in it. Makes sure any claims being made are legitimate.

This is the right option for your company if you need constant cash flow and if you invoice B2B or governments. You must be thinking long term because often invoice factoring companies require a long term contract. A few more characteristics that may help you make a decision in favour of factoring:

• This is a long term relationship and you will be in touch with the company on a weekly basis. You will be working together to do factoring on new invoices, in collection and repayment. They may help you in simplifying this process.
• Your customers' credit history is very important and you will be relying on them for the relationship to thrive. For example, if you are low on cash right now and you are relying on credit card over a slow season (and your credit rating took a hit) but soon will need to have your credit score higher in order to get a traditional loans, factoring may help.

Invoice financing is simply better if you need to short-term cash flow of need short-term growth capital. You may also consider it if you need the following from your invoice loan option:

• Speed: invoice financing is much faster and you get your hands on cash in as little as one business day. No need to worry about assignment notices for example.
• Flexibility: no long term contracts and you don't need to agree to factor all the invoices from one customer. For example, if you are in need to get cash to run your business for the next 3 weeks, simply finance one invoice that matches your expenses.
• Easier: you qualify faster and online and thanks to quality onboarding processes application are dealt with in a matter of hours.
• No more hidden fees: You pay back invoices in weekly payments broken down typically in 12 or 24 weeks and usually you also pay a small fee. In contract terms there aren't any other fees. It is therefore rather easy to determine what you will be paying weekly before you make a decision.
• No direct contact with customers. Since there is no assigned invoices to specific providers, there is no need to be worried about your customers being hassled by a third party.

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