What is factoring?Definition

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Factoring is a financing technique that consists of a company assigning its customer receivables to a factor , generally a specialized company, to immediately obtain part of the amount due. In exchange, the factor takes care of the management and recovery of the receivables. This operation allows the company to secure its cash flow and focus on its core business without worrying about customer payment deadlines. To learn more about factoring, click right here !

Did you know? A distinction is made between one-off factoring and one-off factoring. One-off factoring involves the occasional assignment of receivables for specific needs, while traditional and continuous factoring involves a regular and permanent assignment of receivables with a long-term contract.

How does it work?
The factoring process takes place in several stages:

Assignment of receivables : First, the company sells its receivables to a chinese student data factor at a reduced price, generally between 80% and 90% of the nominal value of the receivables;
Cash Advance : The factor then immediately pays a cash advance to the company, providing rapid liquidity.
Receivables management : The factor takes care of debt collection. It can manage reminders, disputes and payment monitoring.
Final settlement : Finally, once the receivables have been collected, the factor pays the remaining balance to the company, less service fees and interest.