Lack of sufficient creditworthiness and optimal financial liquidity.
By returning its receivables to the factor, the company increases its balance on the current account and may settle the most urgent obligations. Thanks to this, it achieves the ability to quickly pay its suppliers, which is often associated with receiving favorable rebates, which can more than cover factoring commissions.
Problems with receivables management when contractors are late with payments.
This can be particularly troublesome. with the simultaneous accumulation of such situations, which unexpectedly makes it difficult to meet one's obligations. Factoring is a solution to this problem because with its support a more predictable business model is created. This is due to the fact that the factors eliminate these delays and influence contractors to pay their liabilities faster.
The invoice owner is interested in ongoing financing, but at the same time he cares about securing his receivables.
He chooses non-recourse factoring, thanks to which he focuses on his main business. During this time, the factor takes over all potential problems with contractors and compensation procedures.
The company does not have a sufficient business history.
When making a credit decision for working capital loans, banks rely on previous periods. Enterprises with a small seniority or characterized by high growth dynamics cannot count on a sufficient level of granted credit limits. In factoring, it does not matter as much. This enables you to obtain financing that matches your future capital needs.
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