7 Good Reasons to Start Buying Invoices on the Hiveterminal — hiveterminal.com
Why you should care about invoice financing.
What is Invoice financing?
Invoice financing is a powerful tool businesses can use to manage their cash flow. After successfully completing a task for a large enterprise, a small or medium enterprise (SME) will create an invoice and send it to them, their debtor. If the SME is in need of quick liquidity, it can sell this invoice to investors instead of having to wait for the debtor to pay their bill.
Doing this can be lifesaving for SMEs, as it often takes 90 or even 120 days for an invoice to be paid. During this waiting period, the SME might not be able to take on new assignments or pay its employees, and it may go out of business entirely.
The opportunity invoice financing presents is clear to the savvy investor. It is a huge market with some $3 trillion in volume per year, growing at a CAGR of over 13%. Invoice financing can also get you a nice return on your investment.
So, let’s dive into the seven reasons why you should consider buying invoices:
1. Good Potential Return on Investment
Potential ROI is one of the biggest reasons why investors should be interested in this market. The investor with a keen eye for the right invoice, and good risk-management practices, can achieve a 45% internal rate of return (IRR) per annum.
For example, if an investor buys a €100 invoice for a 9% discount, he or she will pay €91 to the invoice seller, and a 1% Hiveterminal fee (totaling €0.91) in HVN. This adds up to a total investment of €91.91, which leaves a profit of €8.09. If repeated 4 times per year, this comes to a total profit of €32.36, which is a 40% IRR on investment.
Compare this potential return with the average return on the stock market: From 1950 to 2009, if adjusted for inflation and accounted for dividends, the average annual return is only 7.0%.
2. Solid Short-Term Investment Opportunity
If you are looking to make a quick buck, invoice financing may be a good investment for you. It is possible that an invoice could take as long as 120 days or more to get filled, but most of the time, it takes one to two months.
This makes for a quick return on your investment, with gains similar to returns in P2P investments.
3. Low Risk
As it is not the invoice seller that pays you back, but rather a large enterprise, the risk of not being paid back is significantly lower. Unfortunately, while it is not very common that an invoice defaults, it can happen. Approximately 2% of all invoices end up defaulting. However, according to ABFA news, the default rates in invoice financing are up to 4 times lower than in bank lending.
If a company does default, does this mean you will not get paid? Not necessarily. The invoice will be passed on to a collections agency in the debtors’s country. This makes it very likely that you will get your money.
If at any point before the default date you lose trust in the ability of the debtor to pay you, there is always a secondary market to sell your invoice to.
4. Ability to Weigh the Risk Against the Return
Invoice financing gives you the ability to weigh risk against return. But, how, exactly?
If an invoice has a higher chance of defaulting, or the period until you receive a payment is longer than usual, the discount at which it is bought will be higher. If you chose to go with such an invoice, you rake in larger profits, but there is also a bigger risk associated with it.
The risk scoring algorithms on the Hiveterminal will assist you in finding the right invoices for your taste.
5. Help Small Businesses
Nine out of 10 SMEs say cash flow problems are hindering revenue growth. Out of all failed businesses, 82% have closed their doors due to cash flow problems. This is a serious issue.
Think of your good friend’s business that was turned down for a small business loan. Probably for no good reason, too. This injustice is what we want to get rid of. We give SMEs a previously undreamed of range of financing options. Wouldn’t it be satisfying to have played a part in leveling the playing field?
6. Small Fees
The fees for buying invoices are very affordable. On hiveterminal.com, you will be paying 1% of the funded amount. However, you can actually pay less by being smart.
Here’s how: As we are using the blockchain to optimize the process, we created the HVN token to fuel our platform.
Hiveterminal fees have to be paid in HVN. As the HVN token changes in price, you will be able to use arbitrage to pay less money for the same service. If you, for example, bought your HVN at the price of $0.05 and use it to pay our fee when the token price is $0.1, you essentially paid 0.5% of the invoice value. Use this knowledge wisely to maximise your profits.
7. Easy to Get Started — No Paperwork Needed
Have you decided to make high returns on your investment through invoice financing? No need to worry, getting started is easy!
Just go to hiveterminal.com and register. As soon as you complete our one-time verification, you can jump right in and start browsing invoices.
Begin by buying an invoice that suits your risk appetite. Your initial funds and the ROI generated will be sent to you directly when the invoice is due. As soon as you are registered, you are all set to start providing liquidity to small businesses and making returns.
All invoice buyers need HVN to use the Hiveterminal. Use an exchange, or our in-house solution, to buy all the HVN you need.
Browse the Hiveterminal to find invoices that match your risk appetite. A world of opportunity is waiting for you, only a click away.
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