It is a financial tool that allows companies to accelerate receipt of money from their customers by selling their accounts receivable to a third party (the factor).
Factoring enables companies to receive payment from their customers faster than if they waited for payment on their accounts receivable. This allows companies to improve their cash flow, which can be particularly useful during periods
Factoring — is the financing of suppliers of goods and services that operate on a deferred payment basis. It's a complex service. In addition to financing, it includes receivables management. It can include coverage of the risk of default and non-payment by the debtor.
There are several types of factoring, including full factoring, non-recourse factoring, recourse factoring, open factoring, and confidential factoring.
Factoring allows companies to improve their cash flow, gain quick access to funds, reduce the risks of accounts receivable, and improve their accounting metrics.
Factoring can be used by companies that have outstanding invoices, including small and medium-sized enterprises, export companies, manufacturers, distributors, retailers, and many others.
The company's financial statement for the previous year, a certificate from the state register confirming the right to sign, and a list of client's supplier companies.
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