Factoring Meaning

Your company has a business and grant payment terms to its customers. You can reduce these delays without changing your commercial policy, by selling your receivables to a third party, a factoring company. The factoring company settles claims pending payment by the due debtor client. You get an "advance" cash.
Subscribe a factoring agreement avoids unpaid through the credit guarantee included in the contract. The factoring company supports the receivables management and relieves you of the administrative burden. The factoring company finances receivables within 24 or 48 hours and allows you to avoid cash offsets.

Types of Factoring

Depending on your needs and characteristics of your commercial policy, you can use different types of factoring.
Confidential factoring or anonymous factoring
The confidential factoring allows you to hide the use of factoring to your customers. The bills are supported by a factoring company without the customer concerned is informed.
Notified but not managed factoring
Notified unmanaged factoring is for a company to sell its debt to the factoring company that finances it while keeping hand on the cover.
Plus: this technique is useful for companies that have no concern for recovery or do not wish to delegate to a third party. It is slightly less expensive (expect a rebate of approximately 20%).
Subrogation
The subrogation notice informs the client to pay the bill, not to the debtor but to the subrogated factoring company. We talk about notified factoring.

Special cases

Import-export factoring
Import-export factoring works as factoring, with either privacy or notified choice. It is relevant for companies that develop internationally, especially those whose work displays differences related to seasonality.
Other bank financing
Other funding exist for those do not wish to engage in a factoring contract and prefer to manage the risks of the cash directly with their bank: discount line for example.

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