Factoring is a form of bank-independent financing. Here, a company continuously sells its receivables on goods deliveries and services to a factoring partner (Factor) and immediately receive cash in exchange.
In factoring, the Factor buys monetary claims on goods deliveries and services that arise between the factoring customer and his trading partner. The Factor pays the company the equivalent of the outstanding receivables.
At Net 30 invoice, they guarantee the company immediate cash up to 90 percent of the invoice amount. The remaining amount serves as blocking credit and will be transferred after payment of the outstanding invoice amount by the trading partner taking into account a discount, discount or return.
In this context, we assume the protection in case of failure. This responsibility is called ducroire. This means that, in the event of the commercial partner’s failure to pay, the loss of receivable incurred will be assumed by Factoring companies.
As part of our full-service procedure, we carry out credit checks, the recall procedure and the collection procedure for our clients.
Their cost structure is very simple and easily rebuilt because it consists of only two factors:
- Interest on debt financing (comparable to current account interest in a bank)
- factoring fees for the recovery of the risk of default and the management of receivables by the Factor
Since immediate liquidity often depends on the use of discounts and allows for better purchasing conditions, factoring fees can be virtually eliminated in the end.
As a private service provider, which does not depend on banks, we offer a service according to your needs. We analyze your financial situation in a perfectly individual way and we develop the best solution in your favor.
Factoring is a financing and management solution for receivables that are increasingly popular with companies. It has become the second source of short-term financing behind the bank overdraft (according to statistics published by the ASF (Association of Financial Companies)).
Depending on the customer’s needs, factoring offers 3 types of flexible services:
Trade receivables financing (only business to business)
Client receivables management, including collection, collection and lettering of trade receivables
The guarantee against the risk of unpaid debts (unless a credit insurance contract is already in place)
It is one of the few markets that have grown by more than 10% for more than 15 years, even in times of slow growth. The factoring market reached 248 billion dollars in 2015 (volume bought by factors).
As companies have come to understand, factoring is a financing solution for all types of companies, whatever their business cycle, and allows them to mobilize and turn into cash an asset that has been dormant for a long time: customer post.
Factoring is aimed at companies of all sizes, present in many sectors of activity, whether these companies are growing, whether they are in the process of reversal or even in difficulty (collective or amicable proceedings in particular).
Factoring contracts allow companies to finance both their sales in France and abroad. Most of the factors are indeed able to mobilize claims on foreign debtors, whether invoices are denominated in euros or in currency, to finance the company.