Imagine this.

Imagine you’ve just secured a new client, delivered your product or service on time, sent the invoice, and then… nothing. The clock starts ticking. Days turn into weeks. Weeks into months. Meanwhile, salaries are due, rent is looming, and that amazing new equipment you were planning to buy? On hold. Sounds familiar, right?

Delayed payments are like invisible shackles. They don’t always appear in your financial reports as red flags, but they quietly strangle your business’s ability to grow, innovate, or even survive.

In 2020, a PwC Nigeria survey revealed that 48% of MSMEs had experienced delayed payments, primarily due to trade policies at the time.

And while that context may have shifted, one thing hasn’t: the importance of cash flow to every business.

As a business owner, late payments, whether from customers or supply chain bottlenecks, hinder your ability to meet obligations, seize growth opportunities, or even stay afloat.

And the worst part? It’s so common that many business owners have started accepting it as “just the way it is.”

But should it be?

Why Payments Get Delayed

Before we jump to solutions, it’s important to understand why payment delays happen.

It’s simple. They could stem from one or more of the reasons listed below:

1. Long Payment Terms: Some clients insist on 30, 60, or even 90-day payment terms. That’s 2–3 months of waiting for money you’ve already earned.
2. Approval Bottlenecks: Your invoice might be sitting on someone’s desk, waiting for a stamp or digital sign-off while your bills pile up.
3. Liquidity Issues on the Client’s Side: Sometimes, your clients are also waiting on payments. It’s a domino chain, and you’re caught in the middle.
4. Poor Internal Processes: Even within your own business, disorganized invoicing or follow-ups can delay collections.
5. Economic or Policy Shifts: As seen in 2020, macroeconomic decisions can affect trade, payments, and supply chains, especially for MSMEs.

So, How Do You Break Free?

Here’s the thing, waiting to get paid doesn’t have to be a reality for your business. In fact, in this day and age, it’s as simple as the swipe of a button.

Enter invoice factoring.

This isn’t a loan. It isn’t taking on debt. It’s simply unlocking the money that’s already yours.

Here’s how it works:

• You deliver your goods or services and issue an invoice to your client.
• A factoring company (like Capsa) steps in and advances you a large percentage of that invoice, sometimes up to 90% instantly.
• Once the client finally pays, the factor gives you the remaining balance (minus a small fee).

Simple. Transparent. Fast.

So, what does this mean for you?

For one, it gives you a regular, predictable cash flow. It ensures you no longer have to wait 30, 60, 90 days, or more. It offers you the funds to reinvest in operations, pay staff, or take on more business obligations.

In a nutshell, it’s a must-have for every serious business owner seeking to scale up. Think of it as having a financial time machine that brings your future cash into the present.

With That Said, How Do You Build a Resilient Cash Flow Strategy?

While invoice factoring is powerful, it’s just one piece of a broader cash flow puzzle. To truly unshackle your business from payment delays, consider combining it with:

• Clear Payment Terms: Be direct with clients. Set expectations from the start.
• Incentives for Early Payment: Offer a small discount for fast payers.
• Client Vetting: Not all clients are worth the trouble. So do your due diligence.
• Cash Flow Forecasting: Anticipate shortfalls before they become crises.

The goal isn’t just to survive delayed payments, it’s to build a business that thrives regardless of them.

Final Thoughts

In a perfect world, payments would arrive on time, every time. But in the real world, you need a strategy for the in-between. You need a way to break free from the bottlenecks that are quietly holding your business hostage.

With invoice factoring options like Capsa, and coupled with a proactive cash flow strategy, you can take back control, regain momentum, and chart a path to sustainable growth.

So, back to that original question and one worth asking again:

Which Payment Delay Is Holding Your Business Hostage?

Capsa helps businesses maintain predictable cash flow by giving them timely access to working capital and ensuring vendors are paid on time.

For many small businesses supplying large corporations, waiting 30, 60, 90, or even 120 days to receive payment after fulfilling their obligations is standard practice. These long payment terms often create cash flow challenges, leaving businesses strapped for funds to cover daily operations or seize new business opportunities.

To bridge this gap, many businesses turn to banks, finance houses, or co-operatives for loans. However, these financial institutions typically charge high interest rates, ranging from 24% to 60% annually (2% to 5% monthly), and require collateral, extensive bank statements, and other documentation due to the perceived risks of lending to SMEs. Even with these hurdles, many businesses still struggle to access the credit they need. And when they do, the process can take as long as three to four weeks, causing missed growth opportunities.

Meet www.getcapsa.com: the invoice factoring marketplace developed by Capsa Technology. This platform allows small businesses that supply large corporations to list and sell their invoices through a quick, secure, and competitive bidding process.

How It Works:
Invoice factoring is a process where businesses sell their unpaid invoices to lenders (financiers) at a discount. Unlike invoice discounting, where businesses retain collection rights, invoice factoring transfers the right to receive payment from the corporate client to the lender. Since repayment risk is tied to the corporate client, who is generally more creditworthy, the cost of invoice factoring is typically lower than invoice discounting.

With Capsa’s platform, small businesses can unlock cash flow quickly and affordably, while lenders gain confidence knowing that repayment comes from established corporations. Visit www.getcapsa.com to experience faster payments, better cash flow, and greater business growth.

Now that we have briefly explained Invoice Factoring, the question now is how does the Getcapsa platform work? The platform works in six (6) easy steps as outlined below:

With GetCapsa, vendors or small businesses can now take full charge of the financing cost for their business as they determine at what rate they discount their invoice, as well as when they want to receive their cash. An improved cashflow simply means vendors or small businesses will not need to require expensive LPO financing options to execute new business opportunities or projects.

Other merits of using the GetCapsa platform are:

1. Competitive, cheaper, and faster mode of access to finance — you can convert your invoice to cash in 48 hours or less
2. No need to wait for 30, 60 or even 120 days to convert your invoice to cash
3. No need for collateral and other documentation
4. Improve cashflow position
5. Support business growth by empowering you to take advantage of new business opportunities promptly

So, what are you waiting for? GetCapsa today and unlock your full business potential.

This weekend, at the Ikoyi Club, we had quite an interesting conversation with a golf player on invoice factoring. The bright business owner seemed rather confident that both factoring and discounting are the same.

“That is discounting”, he said, “my business does not borrow money”.

And that’s fair enough, because it’s a common mix up among many people, business owners especially. For many, it is almost the same, if not the same.

Reflecting on the short conversation, we realised that we would need to talk about it, so that businesses would fully understand the differences between invoice discounting and factoring, and ultimately weigh the value of the latter.

So, yes! Let’s talk about factoring on GetCapsa, again. Shall we?

Most business people know that with discounting, you use your unpaid accounts receivable as a collateral to take a loan. If your accounts receivable says 150M naira, you can borrow up to 105M naira — i.e. 70% of the accounts value — while paying some discount rate (considered as interest).

Now, that works a bit differently with factoring, especially on GetCapsa. Generally, you’ll use your accounts receivables to purchase the credit you require for business operations, but this time you sell the receivables.

This means that your financier will have to take the money from your customer/ debtor directly. With factoring, the amount you get on an invoice can go as high as 80% of the invoice value.

But this is where it gets better with GetCapsa, because for a start, there are multiple financiers bidding to buy your invoice, so the trade value can go as high as 97%.

On the platform, you pay a service fee that is 0.85% of the invoice value and by the end of the transaction, you will have traded a maximum of 2.5% of the entire value. Now, that’s premium!!

Other details to consider between traditional discounting and factoring with GetCapsa is the time of transaction. Unlike discounting, when factoring on GetCapsa, you can verify your invoice and get paid in less than 48 hours. In fact, it can happen as fast as 30 minutes with a secure system that ensures your details are protected.

We are an invoice factoring platform providing you access to lots of financiers and ensuring that your invoices get the best rates in the market. If you need more details or would like to speak with us, call/ WhatsApp 0704–627–2950.

Here’s how it happens:

When a market is booming, a good business manager can convince the bank to service your business plan with a loan. You might even get some concession on the interest rate, but the downside is that business managers may be too excited to consider the long-term, compound effect of servicing the loan in the future. Some issues may be beyond the control of the company such as “what government policy or social factors can overturn the current market structure?”

Debt financing gone wrong can cause your company to lose another chance of securing more loans from the bank. Also, the cost of financing can become a business burden, diminishing gross revenue significantly and leading to bankruptcy in severe cases.

Take the case of local Exploration & Production (E&P)companies that bought divested interests from IOCs in Nigeria

Many local E&P companies that invested in IOCs sellouts in the early years of divestitures took expensive loans of up to 18% and 21% interest rates. The market was booming, no one seemed to foresee how easily the market would suffer from global political insecurities. Business managers projected viable returns on investment.

With the current instability in commodity pricing, repayment has become a burden because asset valuation and incoming revenue did not match.

This is why we advocate that every business manager must arm themselves with a portfolio of alternative financing options.

Instead of relying completely on loans, some companies have a financial structure that includes equity funding. But, what happens when you are not ready to part with company shares? Then consider other mixes like invoice factoring and product presales.

With less focus on debt financing, it is easier for the management team to see through heavy rates that can cripple income in the future.

No doubt, good financing unclogs the wheels of business operation. It smoothens business routines and accelerates business growth and expansion. On the other side, poor financing can mar everything you have built and deter business growth, hence the need for agile financing.

Oracle defines Agile finance as a methodology that embraces the technologies and skills to enable digital finance adoption. Over time, many business owners have employed traditional finance models such as loans and overdrafts to sustain their businesses. However, there are many downsides to this finance model.

For example, loans are not flexible and may put your business at further financial risk when you default on a stipulated payment timeline. Also, the downside of an overdraft includes non-access to large funds, high-interest rates, changes in the limit, and unexpected refund requests by the bank.

As against all the odds posed by the traditional finance model, Agile financing offers swift and efficient alternatives to shortages in operating finance. Agile funding helps an organization to be flexible, resilient and efficient. This model is a catalyst for business growth.

Meanwhile, as a business owner, you must be able to identify when to employ alternative forms of funding like LPO, grants, factoring, recurring revenue financing, and equity sales.

Let’s put context to it

Assume your company got an order from Xcel Group to deliver some products in two weeks at a time when there’s no pending invoice and no cash to put this order in place. Traditional finance would require you to take a loan for that order. However, with that timeline, it is impossible to get the money you need because traditional loans are expensive and their processes are time-consuming.

In this scenario, an agile funding system will jump on purchase order finance because it leverages the cost of the order and takes less time for funding to be approved. It is also less expensive than taking a loan.

On the other hand, if your business has pending invoices that can cover this transaction, factoring comes in handy. According to MarketFinance, invoice factoring is a way for businesses to fund cash flow by selling their invoices to a third party (a factor, or factoring company) at a discount.

Invoice factoring can be provided by independent finance providers, or by banks. Alternatively, it is known as Debt factoring, Invoice finance, or Asset-based lending. If you are using a factoring platform like getscapsa.com, you can get the funds within 24–48 hours after your invoice is approved. Knowing the right decision to make at every point is priceless.

Some of the impacts the Agile Funding system has on your business growth include;

Customer satisfaction

When customers are satisfied, they are bound to spread their satisfaction to people around them. This means that there is a high chance they introduce more people to your business and this automatically translates to more profit

Rapid deployment of resources

Agility helps quick allocation of resources to where it is required at every point in time. When resources are moved as quickly as possible, harnessing every opportunity from that project or order is possible

Reduces complexity

Agile technique helps dissolve the hierarchy of decision-making and creates a smoother path for resources to flow

Faster result

Agile allows faster release of products, resources and responses from clients because it reduces the chain flow of decision making

The end result of all these benefits leads to growth in sales, management and many other aspects of a business. With these, you can unclog the specks of dirt in the wheels of your business operation.

You probably do a lot of LPO financing for your business and you are wondering why you should consider invoice factoring.

Well, Invoice factoring and LPO financing solve similar problems for businesses — providing funding to a supplier before the due date of payment. Businesses that use these forms of financing are often B2B structured and need the funding solution for a short period, usually 3 months (90 days). Nonetheless, there are differences in how these funding solutions are applied or who can use which.

With Local Purchase Order (LPO) financing, you can access funding to make supplies after your buyer has confirmed your purchase order. An LPO lender will require that your buyer is able to pay immediately upon delivery. The amount advanced to your business will range between 70% and 90% of the value of the order amount. LPO financing works with companies that transact tangible products like construction, wholesale distributors, and trade companies. A major setback with this form of funding is that you can only use the money for a specified transaction.

Invoice factoring is viable when you have completed your delivery or service and have a signed invoice that affirms the complete transaction. The company that finances your invoice will charge a fee and fund up to 90% or 95% of the value of your invoice. You can opt for invoice factoring if your business issues invoices and your buyer is creditworthy. Additionally, funds from invoice factoring can be deployed in a variety of operation activities like salary payment and servicing equipment.

To learn more about invoice factoring, sign up here

If there is an established problem that micro, small and medium businesses in Nigeria face, it is the shortage of options for business financing. To be fair, this problem is not unique to Nigeria; but our focus today is on the SME sector within the country. This article explores the options these MSMEs have in funding their existing businesses.

Frankly, businesses have limited options for funding that can help them meet daily management targets that will lead to growth and expansion. Most CEOs and top management personnels focus strictly on loans as a means of funding, with banks evading SME loans because of associated risks. Even though deposit banks have been directed by the CBN to maintain a minimum Lending Deposit Ratio (LDR) of 60% to SMEs in the real sector, many banks prefer to pay penalties totalling to half the required amount rather than take on the associated risk.

Loans are expensive. Many SMEs are unable to meet up with the collateral demands that banks and other financial institutions ask for. Even though many financial companies are waiving the collateral requirement, with the proliferation of fintechs, this waive comes with its downsides. No collateral loans (or unsecured loans) mean higher interest loans. Because the financier is taking a higher risk in lending without collateral, it compensates by charging a higher interest rate.

Other forms of available funding methods include grants, venture capitalism, and bootstrapping. Data shows that 73% of businesses in Nigeria bootstrap but it is not enough causing the business to grow at a slower pace, except if it has some significant financial reserve. Operating within personal financial scope may feel safe, but it takes its toll on growth and expansion. Missing contracts because one is waiting for a client to pay an outstanding debt can drain the business.

Grants on the other hand allow you to expand your business without the demand of repayment. Free money! Unfortunately, they are scarcely available on the business street. Getting one often requires some form of competition or rigorous process to prove that a company is worth the sum. The guarantors will often follow up on the grant winners to ensure that the monies disbursed are utilised accordingly.

If one is not looking to give up some company share, venture capitalists are the last financiers they should be looking at. Besides, venture capitalists are often on the lookout for fast rising companies that they can invest in. These monies, though, could come handy in running the day to day activities of the business like paying employee salaries.

We have explained all these to establish that there is a huge financing gap that existing financial bodies cannot fill. However, the rising alternative finance options in the country presents hope for its SMEs. The Open Banking Framework issued by the Central Bank of Nigeria provides guidance for the operation of fintech solutions including investment and financial management/crowdfunding. This niche accounts for alternative financing.

Alternative financing options often work in two parts. It provides funding options for businesses and a viable way of investing for individuals and/ or corporations. The Securities and Exchange Commission (SEC) provides the rules for regulating this financial sector.

Business owners who stay abreast of development in the finance sector have a better chance of steering company growth in the right direction since money is often what lubricates business processes. So, if one has to advise an SME owner this year, it will be to remind them not to stay stuck on traditional methods. By all means, they need to stay current with developments in the fintech sector and general financial industry.

This week Microsoft, Flapmax announced Capsa Technology as one of the startups selected for its incubation programme — FAST accelerator. The 12-week programme will begin on March 21 with 12 startups from 6 countries participating.

This is the first cohort of the FAST accelerator program designed to help Africa’s digital ecosystem scale through local startups. For us, this is a huge leap because the FAST Startup Accelerator programme will help us to scale our ongoing/ future product development projects. It will also help us gain better access to SMEs in the African market, thereby improving our footprint and impact on the continent.

In the words of Microsoft Startups Lead, Gerald Maithya, “Participation in the FAST startup accelerator programme will help entrepreneurs capture available funding opportunities and plan for growth and future market expansion.

Hello!

We are back to bringing you insightful notes that can inform your business growth.

In Today’s Read:

• Alternative Finance Projections in Sub-Saharan Africa
• BUA Foods list on Nigerian Exchange

Alternative Finance Projections in Sub-Saharan Africa

According to a 2021 report from Cambridge Centre for Alternative Finance, Sub-Saharan Africa has experienced progressive year-on-year growth in the market volume of the Alternative Finance industry. For example, the market raised a total of $1.2 billion USD in 2020. This is a big deal because alternative financing is an innovative way for small businesses to get funding beyond the traditional bank system.

The Organisation for Economic Co-operation and Development (OECD) categorizes the market into asset-based finance; alternative debt; hybrid instruments; and equity-based finance. Asset-based finance is an easy alternative for raising working capital since funding is based on the value of the pledged asset, not the value of the business. Invoice trading (factoring) is an asset-based model that lets you raise funds against the value of your invoice or accounts receivable.

Alternative financing continues to show huge potential in bridging the funding gap existing in various markets, including Africa. FCI projects that by 2030, the invoice factoring market in Africa will grow to €10 billion with Nigeria as a major contributor. Advancement in tech is also contributing to the efficiency of rising solutions in the industry.

Though alternative finance models have existed for a while, there are more innovative approaches in recent years. As economic downtimes continue to test the reliability of traditional systems, alternative models will bridge the gap created by the tension.

News: BUA Foods Lists on Nigerian Exchange

Earlier in January, BUA Foods got permission to list on the board of the Nigerian Exchange. The 18 billion shares admitted to trade allow BUA Foods shareholders to freely trade their shares on NGX.
Read more here.

Regards,
The Capsa Team

Hey there!

In our latest issue we talk about:

• Investing in Alternative Finance
• Getting to know Nigeria’s new digital currency, eNaira.
• Webinar: Empowering SMEs Through Alternative Forms Of Financing

Alternative Financing is here to stay, we mean it.

There are challenges that come with running a business: risks, sudden policy changes, payment defaults…etc These and many others are some of the challenges business owners face today.

However, in the midst of all the above, alternative finance is going through explosive growth all around the world and we owe this to the advancement in technology and the great value alternative finance platforms offer to SMEs.

Alternative finance refers to financial channels, processes, and instruments that have emerged outside of the traditional finance system such as regulated banks and capital markets.

Years back, if you needed finance for your business your options were limited to traditional borrowing from the bank. Alternative finance has since scaled from an obscure source of funding to a recognized alternative, giving business owners diverse options for funding the growth and expansion of their businesses. Alternative finance has made raising finance less bureaucratic.

According to a Statista Report; Total transaction value in the Alternative Financing segment is projected to reach US$7,702.9m in 2021. Total transaction value is expected to show an annual growth rate (CAGR 2021–2025) of 7.76% resulting in a projected total amount of US$10,388.3m by 2025.

The Alternative Finance models have given opportunities to individuals and institutional investors to access a wide range of different investment classes that all have decent returns.

Some of the popular alternative finance models are;

1. Invoice Financing
2. Peer2Peer Lending
3. Equity Crowd Funding

At Capsa, our focus is on Invoice Financing (Invoice Factoring) and we’re making it easier for investors to diversify their portfolios with our secure and seamless platform. Invoice factoring allows businesses to raise money by selling invoices to a factoring company at a discount. The average term for returns on the platform is 1–3months with an average Net Annual Return of 8%-18%. Benefits of trading invoices range from; diversification of investment portfolio, attractive returns, secured invoices backed against receivables.

Getcapsa.com is built on efficient blockchain technology, allowing investors to trade on invoices in a safe and smooth way.

Note that being a vendor on the Capsa Platform doesn’t stop you from being an Investor.

Getting to know Nigeria’s new digital currency: eNaira

On the 25th of October, 2021, the Nigerian Government officially launched the eNaira and it is now ready for use by the public. All you need is a bank account and BVN to sign up and start sending and paying money online.

There are two versions of the app: eNaira Speed Wallet for individual users and eNaira Speed Merchant Wallet for businesses and enterprises.

Get to know more about it here.

Webinar — Empowering SMEs Through Alternative Forms Of Financing

In Partnership with the Enterprise Development Centre, CAPSA will be organizing a webinar focused on empowering SMEs through Alternative Forms of Financing. It promises to be insightful and interactive.

Enjoy the rest of the week,
The Capsa Team