About factoring
What is factoring?
Factoring or receivables purchase is a financial service that uses accounts receivable owned by a company to raise funds. Specifically, a company sells its accounts receivable from the provision of goods and services from other businesses to a factoring company. This transaction allows businesses to receive funds immediately without waiting for payment deadlines.
Benefits of factoring
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Instant funding: Get cash right when you need it, without waiting for receivables to be collected.
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Improved cash flow: Better cash flow with regular cash inflows
Flow management is possible. -
No credit check or collateral required: Generally,Because factoring focuses on the quality of accounts receivable, strict credit checks and collateral are often not required compared to traditional financing.
Disadvantages of factoring
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Costs: Factoring involves fees and discount rates, which incur the cost of financing.
The market rate for factoring is 10% to 25% for the first contract between two companies.
The average price for factoring between three companies is 5% to 10% for the first contract. -
Possible Misconceptions: Especially for small businesses, factoring can be misconstrued as indicating poor financial health.
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Availability: Not all companies have access to factoring services, and some service providers may have restrictions on certain conditions or industries.
Factoring contract form
What is inter-company factoring?
Two-way factoring is an easy way for your business to get cash quickly.
In this method, we sell the uncollected accounts receivable that you expect to receive from other companies to our factoring company.
We pay most of our receivables to our customers upfront, and they have access to their funds right away.
How does it work?
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Selling Accounts Receivable: You sell us the unpaid invoices (accounts receivable) for goods and services provided by your business.
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Instant Funding: We credit the majority of the value of sold receivables to your account immediately.
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Hassle-free: No interaction with the debtor (your customer) is required. All procedures are completed between us and the customer.
What are the benefits?
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Get money instantly: Get the money you need right away, without waiting for accounts receivable.
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Simple process: No complicated procedures are required, just the conclusion of a contract and registration (carried out by us).
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Accelerate business growth: Readily available capital allows you to pursue new investments and other business opportunities.
Bilateral factoring is an ideal option, especially for companies that want to secure funds quickly or want to be freed from collection work. Work with us to support the liquidity and growth of your business.
What is three-way factoring?
Three-party factoring is a financing service that involves three parties: the customer (seller), the customer's business partner (debtor), and us, the factoring company. With this service, customers can quickly turn their accounts receivable into cash and increase the liquidity of their business.
How does it work?
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Sale of accounts receivable: Customers sell us invoices, etc. (accounts receivable) issued for goods and services provided.
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Immediate Funding: We pay you upfront a large portion of the face value of your accounts receivable.
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Collection Agency: We collect accounts receivable directly from debtors. Customers do not need to be involved in the collection process.
What are the benefits?
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Immediate cash flow improvement: Get your money right away, without waiting for accounts receivable.
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Reduced collection effort: We handle the collection of accounts receivable for you, freeing you up to focus on other business activities.
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Improved financial stability: Regular inflows of funds help stabilize your business's financial health.
Three-way factoring is the perfect solution for businesses that want to secure funding quickly without having to worry about collecting their accounts receivable.
By managing payments from buyers, we can ensure that our clients have the funds they need to run their business, leading to further business opportunities.
For customers considering using factoring
Types of factoring
We will explain all types and mechanisms of factoring.
Contract flow
We will explain the general flow of a factoring contract.
Is transfer of debt legal?
Factoring itself is a legitimate financial service. It is a form of dealing with the buying and selling of accounts receivable between companies and is widely accepted as a business practice in many countries.
Be careful of unscrupulous traders!
Unscrupulous factorers are factoring companies that engage in fraudulent or improper business practices.