Advantages of Factoring

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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.