Advantages of Factoring

Advantages of Factoring

• working capital optimization
• credit protection against bad-debts, debtor insolvency and losses
• reduction of your DSO (Days Sales Outstanding)
• increased debt capacity
• transformation of fixed costs into variable costs
• efficiency in sourcing new customers using up-to date credit information and experience
• credit and receivable management
• high liquidity with increasing bargaining power and discounts from your suppliers
• cash-flow optimization and better forecasting
• optimized treasury planning
• more time to focus on core business operations

Difference between bank loan and factoring

• Factoring is an Asset Based Lending (“ABL”) product.
• The emphasis is on the value of the receivables and quality of your debtors and not only on the assessment of your creditworthiness.
• Factoring is a flexible facility in a sense that financing is closely linked to the turnover assigned and can be utilized depending on the client’s needs.
• Factoring may influence the balance sheet ratios of a client in a positive way (liquidity and solvency for example).
• Factoring products provide better efficiency in terms of pricing, service time, operational workload, etc. in short-term financing.
• Credit-insurance service for protection against bad-debts
• Tailor-made solutions are possible depending on your needs
• Very often higher credit facilities are possible when compared with bank loans, as they are based on the current value of the sales ledger and not on historic management information.
• Thanks to our receivable management, factors has not only direct contact with the client, but also with the debtors
• Risk mitigation on several buyers instead of one client.