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Financing through Factoring and its Advantages

Factoring involves the offering of financing and collection services in return for the assignment of future receivables, which arise from the sale of all kinds of goods and services backed by invoices or documents which are the equivalent to invoices.

Within the scope of factoring, companies receive financing (cash management) or collection management services depending on what they choose. The benefit provided from factoring services increases in line with selected service(s).

Advantages of Factoring

  • Financing provided through factoring is faster and more solution-oriented than bank loans, as it is based on the transfer of trade receivables.
  • Factoring converts deferred receivables into cash through cash management services, thus enabling that raw materials are purchased in cash and lowering costs arising due to downtime. Factoring raises production efficiency, business volume and profitability, while also gradually reducing the need for external resources.
  • Provided in parallel with factoring, receivable management services enhance the competitive strengths of businesses as well as helping them expand their market shares and improving their quality standards by offering a maturity advantage.
  • Cash management enables more organized and realistic cash flow plans.
  • Thanks to reliable intelligence, the most recent information with respect to the buyer’s situation and effectiveness in the market is accessed, thus preventing possible problems in collection that may take place in the future.