Today's Pick (15/06/12/107/801) Factoring facility a viable option for entrepreneurs

Factoring facility a viable option for entrepreneurs

By Bilqis Bahari

bt@nstp.com.my

2012/06/11

However, factoring services provider SME Factors Sdn Bhd may just be the funding solution for SMEs in

need of cash.

Chief executive officer Syed Zed Al Qudsy said the bottom line for SMEs is that they need support in terms

of funding.

He added that factoring is a viable option for SMEs as it will assist them in their businesses.

Factoring facilities have been in the country for around 30 years, but yet many SMEs do not know or

understand about the service, he said.

"They don't know how factoring can assist them, how it can help them in their businesses," Syed Zed told

Business Times in an interview recently.

A factoring services provider is a financier that assumes the receivables of companies to which loans are

disbursed. A typical initial loan facility could be up to 80 per cent of the invoice value. The factoring

company will assume the invoices and in turn collect payment on behalf of its customers.

The payment then will be returned to clients minus the fees for its services.

"In simpler terms, if you have a factoring facility with us, you can trade your invoice and we will give you

cash," said Syed Zed.

What distinguishes SME Factors, which was set up three years ago, from other SME loan providers is its

accessibility and speed.

"Our products are more accessible to SMEs simply because they are tailor-made for SMEs," he said, adding

that SMEs could get the company's facility within three days after an assessment is made. The fund ranges

from RM50,000 to RM30 million.

SME Factors currently has more than 2,000 clients from different sectors, such as construction, services and

manufacturing.

Moving forward, Syed Zed said plans are in the pipeline for the launch of a fund that caters to the private

sector within the next three to six months.

It is also planning for an initial public offering.

"Of course, this year we want to focus on growth and listing is part of our growth, but we want to be sure that

we are ready for that," said Syed Zed.

Source : The New Straits Times                        Date : 11 June 2012

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