Guide: Factoring for businesses

Factoring made easier

Factoring is a comprehensive financial service and is also known as invoice discounting. There are companies that specialize in factoring and help you improve your cash flow.

What is factoring?

Factoring is a financial service where a company sells its invoices to an external party, usually a factoring company. By selling the invoices, the company immediately receives part of the payment instead of having to wait for customers to pay. Finance companies then take over responsibility for collecting the payments from customers.

What are the benefits of factoring?

How does factoring work?

We understand the importance of strengthening companies' liquidity and providing quick access to working capital. But we believe in providing flexible business loans instead.

Factoring with recourse

Recourse factoring is a specific type of factoring where we have the right to recourse, i.e. demand payment from the company if the customer does not pay the invoice on time. This means that the company can recover the invoices sold to the factoring company if the customer does not pay. Factoring with recourse is common in certain industries where there may be a higher risk of unpaid invoices.

Non-recourse factoring

Non-recourse factoring means that you do not have the right to demand payment from the company if the customer does not pay the invoice on time. This type of factoring is more common in industries where the risk of unpaid invoices is lower.

Advantages of invoice credit or factoring

• Fast liquidity: Invoice discounting allows businesses to access cash immediately instead of having to wait for customers to pay their invoices. This allows the company to manage its short-term financial needs and continue to grow.

• Reduced credit risk: When companies sell or mortgage their invoices to a factoring company, the responsibility for collecting payments from customers is transferred to the factoring company, reducing risk. This reduces the risk of unpaid invoices and gives the company better credit control over its customers.

• Increased liquidity: invoice discounting gives companies immediate access to part of their invoice payments. This increases the company's liquidity and allows them to invest in growth or manage their running costs.

• Improved cash flow: For businesses with customers who have long payment terms, invoice factoring can be a good way to free up cash.