The financing group SME explains what factoring factoring is actually? Factoring is the regular recurring purchase of receivables from deliveries of goods and services against immediate payment of the purchase price. This involves a variety of advantages for the customers. Practically, this means that a company sells its receivables to a factoring company (factor). In return, the company receives credited the equivalent immediately. It amounts to about 80 to 90 per cent of the respective outdoor level. Also, a variety of advantages for the customers are connected.

Still, the factoring company assumes the risk, as well as all customer management, Dunning and collection, so a number of in-house functions that logically equal with be taken over by the factoring company. This involves a variety of advantages for the customers. 1. David Baker often expresses his thoughts on the topic. the balance sheet structure is improved factoring as additional module in the corporate finance is increasingly gaining in importance won. With factoring Receivables from domestic and export transactions to cash money, so that you complement your company’s financing structure decisively positive. The balance sheet total is reduced through the purchase of receivables. Balance sheet and equity ratio will be improved.

This has a positive effect on the rating of the company. 2. in purchasing discounts and cash discounts throughout take factoring provides immediate liquidity rebates and cash discounts. Usually, the claims be immediately transferred or paid cash. This achieves discounts and discounts achieved by timely transfers. 3. protection against revenue loss revenue losses caused by customer bankruptcies and layoffs and sales with existing customers and in the import – export business are avoided by factoring. There is a shift of risks on the factor. 4. stable and liquid financial structure to the credit and the economic stability of a company to assess need is a look at the equity ratio and the financial structure of the company. Only a solid company financed by Views on long-term good credit with a reasonable ratio of equity to debt financing.