Entrepreneurs, factoring or factor is aimed at all companies dealing with professional clients whatever their size!
The factoring market in 2017 was dynamic. The market recorded an increase of 8.4% compared to 2016 (Source: Les Echos).
Factoring is an operation by which a specialized establishment called a factor takes charge of all or part of the collection of accounts receivable (BtoB) of a company.
In exchange for this mobilization of receivables, the establishment pays part of the invoices assigned to the company.
The contract, concluded between the company and the factor, defines the rate of the various commissions and the amount of the guarantee fund.
The guarantee fund is used to cover the risk of default. Its amount is defined according to the risk estimated by the factor by analyzing the company's customer file.
Short-term financing solution, it allows you to optimize the management of your cash flow and your customer payment deadlines. As your cash flow is optimized, you can focus fully on growing your business.
The mobilization of the receivable by a factoring organization allows you to secure it and is a guarantee of quality for your financial and commercial partners.
Confidential factoring: The client is not informed that it is a factoring company which will be responsible for collecting the receivable.
Notified factoring (unmanaged) : The customer is informed that the receivable is assigned to a factoring company but the entrepreneur retains the management of his customer relationship. It is used in particular in the event that the company does not have any bad debt problems with its customers.
Subrogation : The customer is informed that he must pay the invoice directly to the factoring organization.
Optimized cash management : Controlling your cash flow is an essential point in the life of a company. By factoring , the receivables are paid immediately by the factor and therefore allows you to directly replenish your cash flow.
Reduced risk of default : The financial institution guarantees between 90% and 100% of the receivable via a guarantee fund. You no longer need to revive your unpaid debts and this allows you to devote yourself fully to the development and management of your business!
Loss of customer relationship : Although managing bad debts is time consuming, it is important for most businesses to continue to nurture the customer relationship. Factoring can also be frowned upon by customers and can jeopardize the business relationship.
An expensive solution : Despite a rapid collection of receivables, the cost of factoring is not negligible. Indeed, in addition to commissions can add costs. The factoring establishment will also engage your surety on a personal basis.
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The sums are then reimbursed, with interest, to private lenders and / or companies according to the terms defined in the contract.
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