• February 17, 2023

What is a factor Actualite-EN

That is thata factor ?

In order to’to improve and secure their cash flow, small and medium-sized companies need to provide effective financing solutions. The same applies to very small and micro companies. The factoring is undoubtedly at the top of the list of the most popular solutions.

Qu’is that’a factor ? What is the operating principle of factoring?’factoring ? What are the advantages of the company’s services?’a factor ? All the answers in this post.

What are the missions of’a factor ?

Also known as a factoring company, the factor ensures the revival of the debtor customers, takes care of the steps related to the collections’The factor is simply a financing company that provides financing to companies that have outstanding receivables. Its primary mission is to strengthen the cash flow of SMEs and of VSEs by taking charge of their invoices. To do this, it offers various services. Among the most common ones, we can cite :

  • the financing of the treasury the factor advances part or all of the sums not collected by its customers.
  • the debt collection The factor ensures the revival of the debtor customers, takes care of the steps related to the collections and takes the legal measures which are necessary for the payment’imposed in case of non-payment of the debtor client.
  • l’credit insurance The factor offers the company a’company a factoring contract’insurance to cover the possible risks of non-payment.

factoring company factor

factor or factoring company’factoring: how it works

From the moment you decide to use the services of a factor, the’a factor, you must sign a contract’factoring. The latter defines the services provided by the factor’factoring. It also sets the conditions for the assignment of receivables.

Indeed, the principle of operation of a factoring’s factor is almost similar to that of’a classic financial institution :

  • l’What are the advantages of the services of a company that prepares its customer invoice?
  • It is important to note that the company signs with the advertising company’In addition, the factoring company will provide you with a contract;
  • the factor pays him the amount mentioned on the customer’s invoice (with the deduction of the factoring commission)’factoring services, the financing commission and participation in a guarantee fund);
  • the factor then takes care of the debt collection.

Note that’Before signing a contract with a company, the factor must evaluate the financial situation of the company as well as the solvency of the debtor client. The aim is to minimize the risk of loss as much as possible’unpaid.

Using a factor: what are the advantages ?

For SMEs and VSEs, the use of advertising services is a must’A factor is presented as a practical and economical solution. Practical in the sense that they can preserve their cash flow, thus ensuring the proper functioning of their activities in the short and medium term.

In fact, these companies are not even aware that they are spending money’They will no longer have to wait for advertisers payments of the debtor customers, since the amount will be advanced by the company’factoring. It’s economical, because small and medium-sized businesses don’t have to worry about the cost’You won’t have to worry about all the operations related to debt collection. From the moment the factoring contract is signed, this task falls to the factor’Once the factoring contract is signed, this task falls to the factor. Better still, you are freed from all your collection problems and can devote yourself to your activities with complete peace of mind.