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The pros and cons of factoring and leasing

By | Finance

Factoring assumes that outstanding invoices are sold to a factoring company. The factoring company immediately transfers the outstanding amount and subsequently collects the bill from the customer. Leasing is best known for car financing but can be used for many more things. In general, when leasing an object, it is borrowed for a fixed fee. In the case of a financial lease, you become the full owner of the object with an operational lease. The leasing company remains the owner until the full amount has been paid. There are advantages and disadvantages to each form of financing. In this blog, we will discuss the pros and cons of factoring and leasing.  

The benefits of factoring for entrepreneurs


  1. Liquidity

The factoring company immediately pays out a large part of the amount to be collected. So entrepreneurs no longer have the problem that debtors pay (too) late, but can immediately dispose of the money and invest it again in the organisation.

  1. Capital

Organisations receive more capital through factoring than through a bank loan. As a rule, banks finance about 50 percent of the outstanding accounts, while the percentage of factorisers is much higher (70 to 90 percent).

The disadvantages of factoring for entrepreneurs


  1. Privacy

A factoring company takes over almost the entire accounts receivable. Insights into the financial picture of the company help to do this. Not every entrepreneur feels comfortable when sharing annual figures with an external party.

  1. Cost

The organisation loses part of the margin because part of the outstanding accounts will go to the factoring company as payment for the services. The agreed percentage often makes factoring a bit more expensive than a bank loan.

The benefits of leasing for entrepreneurs


  1. Scatter

Leasing is linked to the financed object. A separate contract can be made for each object (such as machines, cars, or stock). Therefore, multiple sources of financing can be used. Besides, the costs are spread over a longer period. There is no major purchase cost item, but there is a monthly payment. So you don’t have to save long to buy a new object.

  1. Owner

In the case of a financial lease, the entrepreneur immediately owns the object to be financed. This means that you can immediately benefit from the tax depreciation and the investment deduction. This is slightly different from operational leasing. With this form of leasing, the leasing company remains the owner of the object until the last installment has been paid.


The disadvantages of leasing for entrepreneurs


  1. Contract

Leasing usually consists of a multi-year contract that is not very flexible. Breaking open a contract in the meantime is virtually impossible or very expensive. This may mean that when an object is replaced, payment must be made for the object that has since been replaced and the replacement. This happens, for example, when a leased machine breaks down and is replaced during the contract period. Although the broken machine is no longer used, it still has to be paid for.

  1. Cost

Leasing an item is more expensive than buying the item right away. Entrepreneurs pay the lease company to spread the payment of the purchase price.


Check out SmartFunding website for more information. For advice or questions you can always contact SmartFunding on +31 85 303 56 65 or info@smartfunding.nl . You can always contact one of the SmartFunding advisors directly .  

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A guide to managing your team remotely

By | Business

For the majority of the companies worldwide working from home is the only option during the Covid-19 quarantine period. Fortunately, modern technologies make it possible for managers to administer the team and all the work remotely without great effort and expenditures. We want to provide you with a brief guide on how you can manage your team remotely in an efficient way.

Firstly, it is good to understand what challenges can the remote working cause for both managers and employees:


Lack of live supervision

Both managers and employees can express concerns about the lack of face-to-face interaction. Managers can worry about the productivity and willingness of employees to work. The remote workers in term can struggle with reduced access to managerial support and communication.

Interpersonal challenges 

Newly remoted workers need time and effort to adjust information and get used to new settings. Even simple requirements can appear to be difficult tasks when working in a home setting. This can cause an interpersonal challenge among remote co-workers. Lack of mutual knowledge about the team members can eventually convert to a lower willingness to understand each other.

 Social isolation 

The feeling of loneliness is one of the main drawbacks of remote working. Lack of informal social interaction with colleagues can reduce an employee’s feeling of “belonging” to the organization. This in term can increase the likelihood of the worker’s decision to leave the company.

Distractions at home

In case of a sudden transition to the remote work, employees have a greater chance to bare unexpected family responsibilities. Managers should understand that this kind of distraction is greater during the unplanned transition of work to home settings.

So how can managers support remote workers?

Managers can take some inexpensive and instant actions to make the transition easier for employees and reduce the chance of decline in productivity:


  • Establish structured daily check-ins: 

Daily one-by-one or team call is a regular and predictable form of communication that allows employees to consult with the manager, ask real-time questions and express concerns.

  • Provide different communication options: 

Richer technology benefits remote workers. For example, video conferences are especially helpful for the visual cues that allow for better mutual knowledge. Face-to-face conversations help team members to discuss the work, ongoing news, personal concerns and therefore, reduce the feeling of isolation.

However, it is better to use message platforms (like Slack, Zoom, Microsoft Teams, etc.) for the cases when quick collaboration is more important than the visual aspect. They benefit time-sensitive communication and make the conversations simpler and less formal.

  • Set “rules of engagement”:

Regulations of the engagement frequency help workers to stay more productive and satisfied. While some alternatives may be better than others, all employees must agree on the set of expectations for communication.

  • Offer encouragement and emotional support:

Especially in the context of today’s situation, managers need to acknowledge stress, anxieties and concerns that can be experienced by employees. It is good for a manager not only to frequently ask for the opinion and feelings of the remote workers but also to listen carefully to the response. The employee’s stress or concerns should stay the focus of this kind of conversation. With this support, employees are more likely to cope with the challenge and dedicate a better focus on work and productivity.

Help your business survive the Coronavirus

By | Business

Despite the global health consequences, the Coronavirus has a negative economic impact on small and scaling up businesses. We want to provide you with bits of advice on how entrepreneurs can protect their business while working from home.

1. Curate sources of your updates

A constant flow of information about the Coronavirus can make you very unproductive. Thus, try to limit your news alerts and keep up only with the most relevant ones. In this way, you will be able to save your nerves and the nerves of your business.

2. Use your social channels for good news

This is a difficult time for the whole world and unfavorable news is covered daily in all the broadcast channels. As a business, you can use social media and give a positive vibe to your audience. Think about the warming moments, success stories, heroes, leaders that you can share with people and make them feel happier and closer to your brand.

3. Educate yourself

Use this variety of online educational sources to expand your entrepreneurial knowledge about the crisis, finance, marketing and new business strategies that can be tested after the time of distress.

4. Forecast your risk

It is important to create a possible scenario of the outcomes for your business. Consider the worst-case scenario and work from it. What can be the most vulnerable aspect of your business? What measures can be taken to avoid it? How to fix it in case of emerging? You should be set up with all the necessary steps in terms of redundancies, cost-cutting and predictive mapping.

5. Reduce your expenditures

Cost-cutting should be done today. Eliminate any non-essential subscriptions, reduce online sponsored posts, minimize travel, pause any large costs that could be undertaken later on.

6. Do not rush with firing decisions

Employees still have notice periods and can claim unlawful actions if you are not careful. Redundancy is a painful decision that should be considered as the last resort. Ask your team and staff members if they voluntarily wish to compensate a pay cut or explore if they agree to donate back to the business their upcoming holiday. You can consult with free legal advisors that work with employment law or HR about the best decision for your company by phone.

7. Over-communicate with your team

Remote working can be successful; you just need to keep the team spirit. Talk with each other daily, update with news, organize online activities, organize group video talks. Besides, keep all your social channels active and ensure that your team has a clear route through them with a daily plan of action.

8. Explore the opportunities

Flexible working is an opportunity to demonstrate teamwork and test new strategies. Although this feels hard and fast, the advantage of working from home can introduce new ways of working within the company.

9. Work together

We are all together in this. There are no correct ways of doing things and there is no definite outcome. It is stressful, unknown and difficult. However, you should stay patient, thoughtful, attentive, and work with people, not against them. If there was ever a time to lean this, it is now.

Expanded BMKB scheme

By | News | No Comments

The Guarantee for SME Loans (BMKB)

The Guarantee for SME Loans (BMKB) will have a faster expansion scheme because of the Coronavirus issues. The easing measure will increase the size of the BMKB pledge loan from 50% to 75%. This makes it more manageable for banks to grant credit. Moreover, companies have an opportunity to borrow more money earlier. Besides, the scheme will be further expanded compared to a previous announcement; it will additionally apply to Bridge loans and Overdrafts with terms of up to two years.

Essential for the liquidity of smaller entrepreneurs.

The State Secretary Keijzer explained: “The BMKB can be used by companies for a bridge loan or overdraft (the amount that they are allowed to overdraft). The expansion is essential for the liquidity of smaller entrepreneurs who miss out on income or production due to the Сoronavirus. The suppliers, travel agencies, but also companies that can no longer obtain raw materials from abroad”.

€ 300 million in additional financing is already available immediately.

The government estimates that with this first step, € 300 million in additional financing will immediately be made available to SMEs that are affected by the Coronavirus. The extension will take effect from Monday, March 16, 2020, and will be a part of a package of measures already announced last week by the government to deal with the economic consequences of the Coronavirus. Entrepreneurs affected by the corona issue can also apply for working time reduction and postponement of payment/reduction of provisional assessment of taxes. Self-employed people can appeal to the Self-employed Assistance Decree (BBZ).