Inversa, an ideal alternative to finance the Digital Kit

Alternative financing mechanisms can help digitalizing agents to finance the Digital Kit and obtain the necessary liquidity

The Digital Kit is set to mark a before and after for many companies. However, this aid program's long payment terms could financially suffocate some digitalizing agents. For this reason, many have begun to look for mechanisms to finance the Digital Kit. E Inversa Invoice Market is one of them.

It is commonly known that the future is uncertain and that, on most occasions, efforts to predict it fall on deaf ears. But there are some certainties within this uncertainty, as contradictory as it may seem. One of them is that, inevitably, the future will be digital.

In just a couple of decades, Internet use has astonishingly taken hold. It is difficult to imagine a day-to-day life without cell phones or computers. These technologies are certainly here to stay, especially in the business world.

Internet presence is already a determining factor in the success or failure of many companies. Countless consumers research social networks, websites and other customer reviews before purchasing a product or service. And just as a good digital strategy can catapult businesses, neglecting these aspects can also take its toll.

E-commerce, meanwhile, also deserves a special mention. More and more users are buying online, so much so that, for many companies, digital channels have already become the main billing channel.

The intelligent use of the Internet and digital resources is a competitive advantage. And turning its back on it can mean losing a considerable segment of customers, who will turn to the competition, with the consequent impact on the organization's profits.

However, not all companies have the resources or the capacity to incorporate digital solutions. Technology evolves at breakneck speed, and keeping up with this pace without falling behind can be a real challenge.

This is why the Digital Kit was born.

What is the Digital Kit?

Launched by the Government of Spain in 2022, the Digital Kit is a program funded by the European Union that aims to boost the implementation of digital solutions in companies through subsidies.

The ultimate goal? To help companies advance in their level of digital maturity, improve their competitiveness and prepare them for all future challenges.

This initiative is managed through the red.es platform, a public entity attached to the Ministry of Economic Affairs and Digital Transformation created to promote the Digital Agenda in Spain.

But what kind of solutions can be implemented with this voucher? Among others are the website and basic Internet presence, e-commerce, social network management, business intelligence and analytics services, customer management, electronic invoicing, cybersecurity… Businesses that apply and want to finance the Digital Kit can choose between these and other services, considering that each has a maximum subsidy amount.

However, this program depends directly on the Public Administration. And this raises a vitally important question. The public sector follows its timelines, and long collection times can become problematic for companies that function as digitizing agents.

After the initial implementation of the solution and the corresponding justification, 70 % of the total amount will be paid (a percentage that is reduced to 40 % when the contracted service is network management). The service provision period then begins, which lasts twelve months. When this is concluded and justified, the remaining 30% (or 60% in the case of social networks) is handed over to the company.

This situation can be overwhelming for certain companies, which are forced to offer their services in advance and could face severe problems in obtaining liquidity. For this reason, many are looking for ways to finance the Digital Kit.

How to finance the Digital Kit?

There are multiple ways to finance the Digital Kit. One of the most popular is to request loans or credits from conventional banks.

For this purpose, the Official Credit Institute has made available to companies lines of financing that cover the project's total cost. These can be requested from the collaborating credit institutions, which will analyze whether the requirements are met and, if so, will accept them. In exchange, obviously, for interest and commissions.

However, another very advantageous and not-so-well-known alternative to finance the Digital Kit exists.

The digitalizing agent has to issue invoices to the beneficiary company for its work. So what better way to finance the Digital Kit than a mechanism based on the advance payment of invoices?

Factoring is an alternative financing system that works in the short term and is very useful to financially relieve those organizations that are in trouble or simply want to enjoy more liquidity. Its mechanics are very simple: the company that has issued the invoice assigns the collection rights to a third party in exchange for the latter transferring the amount in question in advance.

When the customer, who acts as the drawee, pays the debt, the transferor returns the original sum to the investor. Along with it comes interest, which is negotiated by both parties at the beginning of the transaction and is where the investor's profit lies.

Today, many conventional entities have joined this trend and already offer factoring among their services. But there are alternatives where the investor is not written in the singular—quite the contrary.

Companies can also receive financing thanks to contributions from a group of individuals, giving rise to crowdfactoring, a collective financing mechanism. This liberalizes the financial system and prevents banking firms from having so much power when negotiating while simultaneously diversifying the sources of credit for organizations that enjoy greater freedom of choice.

Crowdfactoring is within the reach of any company

The Internet's arrival has brought other advantages, such as the democratization of alternative financing systems. Today, anyone can invest or receive financing from the comfort of their home with just a cell phone.

Online platforms are responsible for this. Alternative financing platforms such as Inversa Invoice Market, an online marketplace where businesses upload their outstanding invoices and access liquidity easily and immediately, thanks to savers who decide to finance them.

The first invoice to finance the Digital Kit was recently published in Inversa. In this operation, which opened a new path in the platform, the Ministry of Economic Affairs and Digital Transformation functioned as the drawee. At the same time, the assignor was a company from the Ferrolterra area that acts as a digitalizing agent, supporting SMEs in implementing digital solutions.

Since it is a Public Administration, the collection guarantee is very high. This minimizes the level of risk and makes the invoices to finance the Digital Kit an ideal option for investors who prioritize security when injecting their capital.

Due to the particularities of the program, in this operation, 70% of the total amount subsidized was financed, corresponding to the execution of the first phase. It also had a term of 144 days, which means that the savers will recover their investment in less than five months, receiving an interest rate of 7% in return.

It should be pointed out that this type of invoice has a peculiarity: the benefits of the investment are multiplied both in society and in the business panorama. Why? By financing them, the investor helps two SMEs simultaneously: the company benefiting from the service and the digitalizing agent providing it.

Thus, the former can modernize and digitize its business, adapting to the new times without losing competitiveness. By financing its invoices, the latter enjoys liquidity and can withstand the extended payment terms of the digital voucher without pressure or worries.

Inversa is, therefore, a very advantageous option for financing the Digital Kit.