WHAT IS FACTORING AND WHO IT IS INTENDED FOR:
Factoring can be defined as a financial instrument by means of which Credit Agricole finances companies on the basis of future (undue) receivables arising from the sale of goods or services in the domestic or foreign market. Factoring is a suitable form of short-term financing for all legal entities that have quality short-term receivables, but that cannot or do not want to collect funds in the traditional way through borrowing. This form of financing is primarily intended for small and medium-sized enterprises. Such enterprises have difficult access to traditional banking products, do not have any assets or have already engaged its assets through mortgages or pledges, so their credit capacity is low.
WHY THE CLIENTS OPT FOR FACTORING:
YOU CAN USE FACTORING SERVICE IN MANY WAYS:
Reverse factoring is a financial service through which the Bank finances the Client’s obligations to domestic and foreign suppliers.
The subject of reverse factoring is the purchase and sale of the existing undue or future short-term monetary debt arising from the agreement on the domestic or foreign sales of goods/ provision of services.
Upon assuming the debt, the factor shall make the transfer of assets to suppliers under the specified invoices, and the Customer shall make the payment to the Bank within the agreed time period.
Reverse factoring provides the Customer with longer payment terms or additional discounts with suppliers, while on the other hand, the suppliers are provided with quick access to current assets.
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