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What is factoring?
Factoring is a financial transaction and a type of debtor finance in which a business sells its existing or future occurring accounts receivable to a factoring company at a discount. A business will sometimes factor its receivable assets to meet its immediate cash needs.
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What are the other benefits of factoring?
- Off balance sheet financing
- A/R are removed from your balance sheet and transforms them into cash
- Improves financial position in terms of ratios
- Easy handling of your international trade
- By communicating with our correspondents who handle the assessments and collection of your outstanding debt
- Increase your company’s sales turnover
- Offer you longer payment terms
- Access to fast cash transfer services
- Off balance sheet financing
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What are the benefits of international factoring?
- International factoring (IF) provides on-the-ground expertise in the buyers’ markets, which is particularly important in the event of a major problem
- Business with importers is concluded in their own language, in their time zone, and in accordance with their normal customs and practices
- Factors Chain International (FCI) is the global representative body for factoring and financing of open account domestic and international trade receivables. It provides a network of locally successful factors using state of the art technology
- IF can provide country-specific information about individual sectors
- IF service can provide valuable assistance in resolving disputes with importers
- FCI is actively extending its worldwide network
- Competition among local international factors can benefit customers who will have access to top-class services
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What is reverse factoring?
- Advance payment is provided by a factoring company to a seller based on invoices confirmed by a qualified buyer
- The buyer concludes a factoring agreement with the factor, in which the latter agrees to purchase and pre-finance current receivables of a predefined sellers
- When the goods have been delivered and an invoice has been issued by the seller, the invoice data is checked by the buyer, who then sends these details, along with a confirmation of payment, to the factor