How Can You Finance Your Working Capital Through Factoring?
Payment terms, which average between 50 and 70 days depending on the industry, directly impact your working capital requirements (WCR). To finance these needs and ensure you can pay your suppliers, cover salaries, and meet other expenses, factoring is the solution that helps bridge the payment gap by allowing you to receive early payment for your accounts receivable. We’ll help you select the factor that’s best suited to your needs and the right factoring solution, while ensuring that your relationship with your banks remains strong.
Finding the Best Factoring Solution for Your Business
Whether it’s traditional, confidential, unmanaged, or with delegated collections… we can set up any type of factoring to provide short-term financing for your cash flow and allow you to outsource—if you wish—the management of your accounts receivable (collections, payment processing, and posting of payments).
We carefully assess your cash flow and service needs to negotiate a factoring agreement (terms, financing level, required collateral, etc.) that serves your company’s best interests. We take care not to strain your relationship with your banking partners by justifying the choice of an external factor or by finding a compromise. We simplify the management of your factoring agreements by raising the threshold for issuing supporting documents.
A 100% online tool for finding a factoring contract: Factorcash
With Factorcash, you can quickly and easily access factoring solutions tailored to your business’s needs!
Request a quote online and receive factoring offers from our partners as soon as possible.
What sets us apart? We help you maximize your financing, secure the best market terms, and mitigate your risks. You’re eligible for a factoring solution if your revenue is at least 100,000 euros.
Factoring and credit insurance: two complementary solutions
Accounts receivable financed by either a factor or a bank must, in most cases, be protected against the risk of debtor default. Our expertise in factoring and credit insurance allows us to select the right solution for you—whether it’s a guarantee issued by the factor or the implementation of credit insurance—to provide broader protection for your accounts receivable.
Half of our clients take advantage of this arrangement: on the one hand, it provides greater security for the factor, thereby increasing the amount of financing available, and on the other hand, it helps drive your business growth.
How Does Factoring Work During the COVID-19 Crisis?
We have been assisting numerous clients with factoring solutions since the start of the COVID-19 crisis, focusing primarily on four key areas:
- Verify that the factor continues to provide financing for all invoices issued;
- Relax the deadlines for defunding and transfer of ownership;
- Release cash when the guarantee fund (also referred to as a retention or guarantee account) allows it;
- Confirm credit limits with insurers (for delegated contracts) or directly with the factor
For the most difficult cases, we schedule a meeting to discuss emergency solutions with the factor.
FAQ on Factoring
What is the concept behind factoring?
Factoring allows you to quickly access the funds from your invoices or accounts receivable without having to wait until they are due. You assign your invoices and accounts receivable to the factor, who then advances you the payment.
Why Use Factoring?
Factoring helps increase your company’s financing capacity and provides immediate cash flow by financing the amount of sales. It also helps improve the company’s debt ratio and cash flow by eliminating accounts receivable. Finally, it helps mitigate the risk of bad debt resulting from your customers’ insolvency.
How much does factoring cost?
The cost of factoring averages between 1% and 3% of the total value, including tax, of the receivables assigned by the company. It includes: the factoring fee, the financing fee, and related expenses.
What are the different types of factoring agreements?
Under an intermediate factoring agreement, the factor is responsible for the collection process—ranging from out-of-court collection to legal collection, if necessary. A full factoring agreement also includes credit insurance to cover the risk of non-payment of the assigned receivables.
How can we reduce the budget allocated to factoring without cutting back on the company's financing?
If the company has sufficient staff to manage its receivables on its own, the factoring agreement may include a collection mandate (delegated management) in favor of the company. In doing so, the factor relinquishes the task of collecting receivables and entrusts it to the company, thereby reducing the cost of the factoring fee.