BNP Paribas Factoring solutions have a wide variety of different and exclusive advantages from which you can benefit depending on your business needs, models and the solution we implement.
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.