Factoring advantage

Factoring as a service is beneficial for both sellers and buyers. There are several areas/fields, where factoring advantages are used: retailers (receiving payments from department stores and retail networks), manufacturers (selling product to a user), deliveries (selling a product to a manufacturer), exporters (product’s solvency evaluation), small and medium enterprises (increasing work effectiveness), and megaprojects’ executors (during competition short billing period is always regarded as a benefit).

What does the seller receive?

  • quick and flexible loan for current assets
  • increase company’s liquidity
  • buyer’s loan adequacy assessment
  • simplified cash flow plan
  • opportunity to increase selling amount
  • strengthen control over debtors
  • opportunity to propose longer payment period for buyers
  • opportunity to make delivery payment at once
  • to improve reserve operations if more funds for product purchase occur
  • to use more time and recourses for core operations
  • to decrease debtor administration expenses
  • to improve discipline for debtor’s payments, because, as experience shows, company’s respect for financial institutions is more visible

What benefits are for a buyer?

  • to plan cash flow easily
  • simplified payment for a buyer (specific billing term, form, address)
  • opportunity to receive attractive conditions from a buyer

© Latvian Leasing association, phone: 67284528