Factoring is expensive
It is a common mistake to compare “apples with oranges”. This a very common occurance when analysing factoring costs.
Factoring includes the collection service of your Invoices and may also include the insurance coverage in the event of late payment or non-payment by your Buyer.
When comparing the price of different fuels also adds to this equation the price of the car? Of course not!
Factoring has several service components and therefore has several charges. See HERE what are the costs of Factoring.
When comparing with other financial services, you should be aware of all price details that are comparable, the advantages and also the explicit cost. In addition, you must also take into account the non-increase in debt, the credit assessment of your buyers and the outsourcing of valueless services
If you have any question specific to your company, ask for a quote from a Factoring Company or Credit Management Specialist. Since most work with multiple financiers and will strive to find the best solution for your business.
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In the case of Non-Recourse Factoring, this means that there is no Recource onto the Supplier. That is, if the Factoring Facility has been set to Non-Recourse, in case of non-payment by the Buyer, the Supplier does not have to return the amounts that have been advanced.
Your business receives the sales you make on credit, so you don't have to wait for the invoice due date (or more). The Factoring Company advances the receipt of invoices that are due 30, 60, 90 or even 120 days later. This makes it easier to manage your company's treasury.
Find out more about other Factoring myths
Factoring is too complex
Factoring is exclusive to big companies
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