Increases Potential Financing
Since the funding you receive is linked to the invoices you have issued, the more you sell the more funding you will receive. Most banks set a funding ceiling for your Company. While under factoring if you increase your sales, the financing you receive also increases.
We all know how it works: The Bank analyzes your Company and decides how much funding can be assigned to you. It is a right and proper process that has worked for many centuries (banks and lenders have been around for a long time).
However, not all companies are equal and the business world is increasingly busy. As a result, services need to adapt to your company’s growth and sales rate.
Factoring adapts to peak cash requirements. Usually, business specialists analyze your company’s cash requirements based on two factors: sales volume and average receipt time.
For example, if your business makes € 100,000 sales per month and receives on average in 90 days (3 months), it will have on average 3 months of sales unpaid, therefore: € 300,000.
For a company of this size, banks usually lend between € 50,000 to € 75,000. This way, the entrepreneur will not be able to get the 300,000 € that his company needs. Therefore, you will have to contract various treasury services to various banks.
With a Factoring Company or a Credit Management Company, you can get the financing and / or management of this process. In addition, you only need to talk to one party.
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Export Factoring can also be called International Factoring. This designation comes from the Buyer being located in a different Country from the Supplier (and probably also in a country other than the Financier).
It is a common mistake to compare "apples and oranges". Regarding the cost of Factoring this is frequent. Factoring includes the collection service of your claims and may also include coverage in the event of late payment or non-payment by Buyer.
Know more Advantages of Factoring
Professional Billing Service
Savings by volume discounts and amount advanced
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