Knowledge base · Factoring · 7 minuten · 10 Sep 2026

Factoring for SMEs: who it works for and who it does not

Factoring is often mentioned in the same breath as sole traders and small businesses. For an SME it works differently, and the thresholds sit somewhere else. This article is about factoring at an SME: when it fits, what the limits are and what you need to get started.

Why an SME is a different story

For a sole trader, factoring is usually about one or two invoices that have been outstanding too long. At an SME it is about a receivables book that moves structurally with your turnover.

That difference decides everything: the product, the rate, and who you get across the table. The sums are different too. A book of two million in outstanding invoices is not a liquidity incident but a permanent item on your balance sheet.

How you work that item out is set out in calculating working capital.

When factoring fits an SME

Three situations come up most often.

Your costs run ahead of your income. You pay staff, materials or stock, and then wait 30 to 90 days for your money. That is the pattern in transport, staffing, construction and international trade.

You are growing and your working capital is not. With a bank facility you hit a fixed ceiling exactly when you want to accelerate. With factoring the headroom hangs on your invoicing, so it moves with you. The detail is in finance that grows with your turnover.

Your security is stuck with the bank. Then factoring is only possible once that pledge has been taken over.

The thresholds, and they are hard

No marketing language here. SOOF Finance works with SMEs and not with sole traders or one-person businesses. The starting point is a funding need from around 1 million euros.

If you are below that, this is not the right party, and that is quicker to establish than after three meetings. There are providers who focus specifically on smaller volumes.

There is one more threshold that often surprises people: for a factoring application your annual accounts have to be finalised.

What gets looked at in your book

Not your turnover but your receivables book sets your headroom. Four things count in that.

Spread. Twenty spread customers fund more easily than one client who is eighty per cent of your book. Each debtor carries a limit.

Payment behaviour. Not whether they pay, but when. Without an agreement the payment term is 30 days, between businesses it may run to 60 days, and from a large company to an SME supplier a maximum of 30 days applies.¹

Whether the performance has been delivered. A receivable only qualifies once you have genuinely delivered. Sending an invoice ahead on an order does not work, as set out in a large order, but you have to buy in first.

Whether your security is free. See above.

What it gives you, and what it costs

Under factoring up to 90 per cent of the invoice value is paid out straight away, and the remainder once your client has paid. The percentage is set out in your agreement in advance.

On cost there are at most two items: a fixed factoring fee, and a daily fee that only starts if your debtor has still not paid after 30 days. The full build-up is in what does factoring cost.

Per euro, bank credit is generally cheaper. In March 2026 Dutch SMEs paid an average of around 3.6 per cent on outstanding bank credit, against 3.1 per cent for larger businesses.² Only with a loan you pay interest on the whole amount and the limit is fixed.

The six sectors where it bites hardest

SOOF is active in every sector, but the working capital pressure is highest in six: import and export, transport and logistics, staffing and payroll, manufacturing and industry, wholesale and distribution and construction and infrastructure.

Every sector has its own payment rhythm and its own assets. Those pages set out the bottleneck per sector and which form suits it.

What to bring to the first meeting

Four documents make the conversation concrete: your debtor list with an ageing analysis, your stock position, an overview of existing security, and your liquidity forecast for twelve months.

What a financier asks besides that is set out in five questions a working capital financier will ask you.

What it comes down to

Factoring for an SME is not about a single invoice but about a book that moves. The threshold is a funding need from around 1 million euros and finalised annual accounts.

If that fits, the spread of your debtors matters more than your turnover. Take the Quickscan to see what sits in your book, or compare providers first with the eleven questions.

Sources

Rijksoverheid, Minister Herbert: bedrijven en overheden, betaal je leveranciers op tijd, 18 June 2026.
De Nederlandsche Bank, Bijna helft van bedrijfsleningen naar mkb, rente ligt iets hoger, 13 May 2026.

About the author

Jaap van Aalst

Commercieel directeur, SOOF Finance

Jaap van Aalst started his first business almost thirty years ago, in staffing and secondment. That is where he saw for himself how many opportunities are lost when money sits too long in unpaid invoices.

Around eighteen years ago he moved into the factoring world, as commercial director. Since then he has sat across the table from countless business owners and seen at first hand what financing questions look like in practice. He looks further than the balance sheet: what the business does, where the opportunities are, and which form of finance genuinely moves it forward.

That is also the basis of his work at SOOF Finance. His starting point is simple: finance is not an end in itself, but a means by which a good entrepreneur delivers on their plans.

Ask your question

Frequently asked questions

No. SOOF works with SMEs. Factoring at SOOF is not available to sole traders or one-person businesses, and there are providers who do focus on that group.

The starting point is a funding need from around 1 million euros. Below that, another provider makes more sense.

Yes. For a factoring application your annual accounts have to be finalised.