Now Turning Back Now with the Essential factoring Processes

Not suffering customer payment delays and being able to count on short-term credit thanks to factoring, the solution is experiencing increasing success. 268 160 million euros in 2016, a jump of 8% compared to 2015, but the device still struggles to seduce the very small businesses. This is without counting on the renewal brought by digital finance. Indeed, some bold techs have embarked on this sector. Factoring  and its promises of speed, efficiency and accessibility will they meet the expectations of companies?

What is factoring?

Classical factoring is defined as a means of financing and managing the client item. A factoring company called “factor” takes care of the payment of the invoices of a company in need of cash while ensuring the recovery of its account. There are also things that you must know about the accounts receivable factoring.

In return, the factor retains factoring fees (from 0.5% to 2.5% of the amounts of receivables) and financing fees (approximately 3%) as remuneration.

Towards factoring : how does it work?

Based on the same principle as traditional factoring,factoring  is mainly distinguished by the dematerialization of 100% of procedures via a web platform . Conditions are voluntarily more attractive than those of traditional factors.

To benefit from these services, here are the steps to take:

  • Register on the platform: all operations are done from a personal space
  • Deposit the invoice online: not necessarily all the invoices, but only those which are to give
  • Receiving purchase offers: Factor notifies the seller by email when an investor offers a purchase
  • Receive the transfer: the seller’s account is credited within 72 hours at the latest
  • Factor not only reviews the file and validates it, but also follows up with the debtor until the debtor pays the buyer when the invoice expires.

Are there conditions of acceptance on the factoring platforms ?

In general, factors  finance only the operating cycle of a company that is solvent. That is to say, able to meet its commitments in the short, medium and long term.

Having to be a commercial legal structure, the company must also be registered, have a SIREN number, etc.

In addition, factoring  start-ups refuse to support an invoice whose due date has been exceeded or whose deadline is relatively close.

Remember however that each platform has its own conditions.

The benefits of factoring

The rapidity

Factoring makes cash available in a very short time at most in 72 hours, instead of 4 to 6 weeks usually.

No personal guarantee claimed

Unlike traditional factors, factors do not require a personal guarantee or deposit.

Better financial health

Factoring makes it easier to improve the company’s cash position, since it can mobilize its short-term receivables and continue to finance the growth of its business.

Time saving

This new device saves considerable time in the management of customer invoices even if the company can only choose to entrust a part of the client.

Accessibility

Fifth benefit, the benefits are addressed to all companies meeting the platform criteria, including the location of the company, the annual amount of turnover, the nature of the claims.

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