So what does it mean Factoring?
Factoring provides realization of operation, according to which the company - factor gives money resources at disposal of the client for a payment. And the client concedes to it the rights of the requirement of money resources from debtor for the goods, put to that, (service executed works) with a delay of payment.
1. Financing deliveries
The factoring company finances your deliveries. There is more no necessity to wait for money from debtors (from 7 about 90 days). After realization of delivery you at once receive money resources at a rate of from 50 % up to 90 % from the sum of shipments. Other means (minus compensation of the company - factor) you receive on the account at once after payment of delivery by yours debtors.
2. Debtor’s Management.
The factoring company conducts the documentation on accounts transferred to factoring, and supervises duly payment of your deliveries. She incurs negotiation with your debtors, saving thus your time and reducing your expenses.
To whom is addressed factoring?
Factoring - convenient and favorable way of accounts for the legal persons and private businessmen. Subjects of economic activity which is carrying out constant operations of sale and purchase of the goods (of granting of services, performance of works) on conditions of a delay of payment (commodity credit) from 7 about 90 days.
First of all, it is the suppliers of consumer goods (products of a feed , alcoholic and nonalcoholic drinks, tobacco products, computers, office equipment, home appliances, pharmaceutical preparations, building materials, auto spare parts, cosmetics, perfumery etc.).
Factoring is used also by companies, which specialize on telecommunicate, transport, polygraphic, tourist, advertising and other services, including those, for which granting the user's payment is raised.
Factoring service:
- The enterprises with a plenty, which debts is expressed by the small sum;
- The enterprises, which are engaged in manufacture non-standard or narrowspesialised by production;
- Building and other firms, which work with the subcontractors;
- The enterprises, which realize production on condition of aftersold service;
- The enterprises, which conclude with the clients the long-term contracts and expose the accounts on end of the certain stages of work or before realization of deliveries (advance payments);
- The requirements, which are exposed to budget organizations;
- The obligations of the enterprises and organizations, which are recognized insolvent;
- Liabilities of the physical persons, branches or departments of the enterprises.
Such restriction is caused by that in the specified cases it is difficult to estimate credit risk, besides there is an additional risk, which is connected to default by the supplier of any contractual obligations.
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