Essential Opportunities for the Factoring Process Now

The product, which was specially designed for insolvency administrators, makes it possible to pre-finance the remuneration of the insolvency administrators against the masses. The existing remuneration claims are assigned to The factoring company. The latter will take over the pre-financing until the insolvency court grants the compensation claim and will provide the insolvency administrator with the corresponding liquidity within 1 to 2 days.

The advantages at a glance

  • Supply with direct liquidity
  • No dependence on processing times of the insolvency courts
  • Liquidity fluctuations are easily and simply compensated
  • Plan the liquidity of the administrator independently and safely
  • Transparent costs (favorable fixed interest rate)
  • Duration up to 24 months

The increased need for liquidity in project business, which is common in certain industries, arises among other things due to the long period of service provision.

Factoring can support the financing in this regard. However, the special requirements for the factoring of project business exist in the fact that the partial invoices to be forwarded must be based on acceptance by the principal in accordance with the terms of reference.

Project business is characterized by high individuality. As a factoring institute with many years of experience in all sectors of SMEs, they work with you to develop individual financing solutions that are specially adapted to your requirements. The purchase order financing option is surely there.

What does factoring do for project business?

  • Independent financing of projects
  • Fast liquidity within 1 to 2 days after invoice purchase by the factor

Sales advantage, as this claim can be settled with long terms of payment immediately after the first partial performance has been completed and advanced by factoring.

  • This ensures the necessary material purchase
  • Payment terms of 120 days are possible for partial services
  • Parallel processing of several projects ensures ongoing accounting levels that can be advanced via factoring

Protection of own current accounts

  • No deterioration of the liquidity situation due to project-related strong sales fluctuations
  • Credit check of the customer by the factor
  • 100% protection against bad debts
  • Start-ups, young companies and creditworthy companies open up an additional financing opportunity

When factoring a variety of special forms are distinguished. However, the fundamental question is whether it is genuine factoring or unreal factoring, because dealing with the default risk is different.

Genuine factoring

In genuine factoring, the factor fully assumes the risk in the event that the debtor cannot pay the receivables.

Genuine and unreal factoring

False factoring

In the case of improper factoring, the factor is contractually entitled to repurchase the receivable purchase if the customer does not pay or finally fails.

Genuine and unreal factoring in practice

For years now, predominantly genuine factoring has been practiced because the security aspect “protection against bad debts”, which is often relevant for factoring customers, is not given in the case of bogus factoring. Reasons for factoring users to opt for the pseudo-factoring procedure are the pre-financing in the foreground or administrative relief of debtor management. This only makes sense in industries with low default rates.

Advantages factoring

Factoring not only brings immediate liquidity! You also benefit from many other effects that factoring allows you, such as cost savings through cash discount payments from suppliers, comprehensive debtor management and much more.

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