Why is it worth choosing recourse factoring?
Factoring is an increasingly popular financial service in Poland. According to the data of the Polish Factors Association, almost 9,000 Polish companies used factoring in 2017 alone. Read on and see why so many companies use factoring.
Factoring is a financial service that finances invoices with deferred payment terms. Due to the popularity of factoring, there are many types of factoring on the market. One of the most popular types of factoring is also called incomplete factoring.
Recourse factoring allows you to finance an invoice with a deferred payment date as early as 24 hours after the factoring agent, i.e. a company using factoring services, provides its copy. Usually, factors (companies providing factoring services) allow the factorer to pay up to 90 percent of the value of a single invoice, and the funds obtained in this way can be used for any purpose.
Thanks to this factoring with recourse directly improves financial liquidity companies, acquiring funds that would normally be frozen on an invoice with a long payment term. Thanks to recourse factoring, the company can obtain the funds necessary to settle receivables from business partners, lessors, the Tax Office, ZUS or employees.
Factoring with recourse is primarily a service much cheaper than non-recourse factoring, called also proper factoring or full factoring. The lower price is mainly due to the fact that the risk of insolvency is not transferred from the factor to the factor, which naturally occurs in the case of the aforementioned actual factoring. deferred payment date, the factorer must pursue claims on his own and settle the amounts due to the factor who has fulfilled the contract and provided the factoring service (faster payment of the advance payment of up to 90 percent of the invoice value).
virtually every company that conducts sales with deferred payment terms can benefit. It does not matter whether the subject of the transaction is a specific good or service. For a company providing financial services, the deferred payment date is also irrelevant, which can be both 14 and 45 days.
Thanks to recourse factoring, enterprises can quickly obtain funds for their current operations, and the price this type of financial service is competitive with traditional solutions offered by banks, such as credit lines, corporate loans or revolving loans.
It seems to me that a lot also depends on the situation and specificity of a given company when it comes to choosing type of factoring. Nevertheless, the service itself is very beneficial and can significantly help in maintaining financial liquidity.
Very nice article, it’s good that you make people aware of the company’s financing possibilities. If there are any bottlenecks, factoring is definitely a good idea.
There are big differences in the price of factoring with and without regression?