Factoring is a financing method in which a business owner sells accounts receivable at a discount to a third-party funding source to raise capital. It is a cash-management tool where long receivables are part of the business cycle, and the business has immediate cash needs.
The client makes a sale, delivers the product or service and generates an invoice. The factoring company buys the right to collect on that invoice by agreeing to the invoice’s face value less a discount immediately.
The benefits of factoring are many. For example:
• Improved liquidity. Improve client’s cash flow by getting a credit up to 80% of the outstanding accounts receivable
• Less administration. Reduce client’s receivable administration by allowing the factoring company to handle it.
• Capitalization on supplier discounts. Many suppliers offer discounts if they are paid in a short period. Factoring may accelerate client’s cash flow, allowing for paying the suppliers earlier and take advantage of supplier discounts.
We arrange for our client tailored factoring services that suit their cash flow requirements. In addition, we also make suitable factoring arrangements for importers