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postheadericon Exceptional Opportunities for the best Factoring Invoices

Factoring is generally more expensive than bank financing. The more the factor takes risks, the higher will be his remuneration. It breaks down into several types of fees.The financing committee remunerates cash advances and is based on the risk estimated by the factor. Including between 4% and 8% of the advances made, its rate is calculated according to the amount and the desired financing period by taking as a reference a short-term conventional bank loan.

The factoring (or service) fee covers the various services related to the management. The rate is based on the volume of receivables transferred, the number of invoices to be processed, the composition of the customer portfolio, and the financial health of your business, and is generally between 0.15% and 2% of the turnover. For the factoring invoices this is important.

Business sold

The guarantee fund covers the risk of unpaid bills; the minimum is set at 5% of the sales entrusted, the maximum can reach 40%. If this guarantee against insolvency is taken care of by the service provider, it happens to be included in the factoring commission.

Finally, ancillary or secondary costs include management and account opening fees, which range from $ 1 to $ 2 per instrument.

What are the benefits of factoring for my business?

By signing a factoring contract with a factoring company to which you delegate the collection of your receivables, you benefit from multiple benefits.

Optimized cash flow

Factoring is an effective financing solution in the short term: you not only recover 100% of the value of your receivables without waiting for their due date, but these funds are also available to you in a very short time (less than 48 hours).

This optimization of the management of your customer account significantly improves your cash flow and thus ensures the balance of your finances, besides that it makes you realize substantial economies of scale on the administrative expenses (expenses of personnel assigned to the recovery, expenses insurance) and financing (financial interests if you have to go through a bank loan to fill a possible need for cash).

Thanks to factoring, your receivables at maturity turn into cash flow, and the turnover of the receivables improves from 8% to 10%. And unlike the “Daily transfer”, the guarantee line is generally not capped.

A lean administration

In addition, you relieve yourself of time-consuming and time-consuming tasks , since the factoring company takes care of the administrative, legal and accounting aspects with great responsiveness.

Released from collection issues and customer credit tracking, you have more time to devote to your core business or other more value-generating activities. By being more available to your customers, by raising your quality of services, you gain competitiveness in an increasingly competitive market.

Customer Insolvency Insurance

To make sure you are dealing with solvent customers, you no longer need to mobilize your teams to requests for information and reputation investigation, the factoring company makes a detailed evaluation. His refusal to commit to a client is a signal that you must take with the utmost seriousness.