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