Smart Contract Based Factoring
Land of Opportunity
Invoice financing or factoring is a financial transaction whereby a business (seller) sells its invoices to a factoring company (factor) for immediate cash.
Factoring creates some barriers in the processes, such as:
- The factor needs to trust the buyer to make the payment according to the terms of the invoice.
- Fraud such as double pledging, false invoice, bogus businesses and buyers-seller arrangements.
- Increasing costs and price by multi-party settlements, assessing risk, and manual processes. Also a threshold for a minimum invoice amount could be created.
However, Fyndoo smart contract based factoring built on blockchain technology is a technology concept of a cost-effective solution that provides transparency, traceability and automation. The benefits of Fyndoo Smart Contract Based Factoring are:
- Enables factoring of small invoices - from as little as 10 EUR. This allows investors to spread the risk.
- Transparency for buyers, sellers and factors - but to no one else.
- Fully automated, and executed factoring agreement.