Factoring is a tool to manage your credits professionally.
Factoring is an administrative support and a financial technique, aiming at fulfilling the company’s need for supply receivables management.
Factoring is a combination of financial services and credit management tools that enable the company to strengthen qualitatively and to value financially its receivables portfolio and its commercial ability to penetrate the market.
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- Factoring is a tool for professional receivables management and the ideal complement to bank financing.
- Factoring is useful for all those companies that are unable to collect their credits regularly and need a specialized support in receivables portfolio management and control.
- Factoring favours durable relation with the company, in order to maximize its support in the administrative, legal, and financial activities related to the management of the company’s commercial credits.
- Speed and certainty of financing, guarantee of the company’s receivables solvency, and contribution to credit management, these are among the main and most appreciated advantages of factoring.
- Companies still know very little about the tool of Factoring, but its use is rapidly increasing.
- Factoring allows saving the costs that companies pay for supply receivables management, thanks to the outsourcing of activities such as evaluation, management and control.
- Factoring is a more complex and valuable service compared to bank financing. To consider its benefits, the terms of comparison are the average cost of financing and the cost of the internal management of commercial credits.
- Factoring produces positive effects on several areas of the company involved in the management of commercial credits.
- Receivables assignment pursuant to a factoring relation is a normal fact in the company’s life.
- Considering Basilea II, the use of Factoring can improve the company’s position towards its lenders
Receivables assignment (Factoring) can be performed in two different ways:
FACTORING PRO SOLUTO (WITHOUT RECOURSE). The factor undertakes the risk of insolvency of the transferred receivables and, in case of debtor’s insolvency, cannot demand the restitution of the advances to its client.
FACTORING PRO SOLVENDO (WITH RECOURSE). The client holds the potential risk in the event of insolvency of the transferred credits.
There are also two types of International Factoring:
Export factoring where the supplier is a subject residing in Italy and operates with debtors residing abroad.
Import factoring where the supplier is a subject residing abroad operating with debtors residing in Italy.