About Factoring
Factoring is a FINANCIAL ARRANGEMENT in which the company sells its short-term outstanding and future receivables to a specialized financial institution (factoring company), with an agreed discount, by the FACTORING LAW.
In addition to traditional factoring, that is, direct factoring, there is also the so-called reverse factoring, where the factoring company pays your outstanding obligations instead of you.
By using factoring services, your company gets working capital faster and increases its liquidity.
ProFinance is here to support you in each of these factoring forms.
Factoring provides you with complete security when selling abroad, because we insure receivables, so you can save on additional costs of bank guarantees or letters of credit. Using the approved limits for the insurance of receivables from buyers, you also indirectly receive information about the buyer's creditworthiness. If the factor is not prepared to approve an insurance limit for an individual buyer, it is probably not safe to sell to such a buyer with a deferred payment term without additional security.
By using factoring, liquidity is achieved without increasing the level of indebtedness. Factoring does not burden company balance sheets, meaning it does not represent an increase in the level of indebtedness in the financial statements and therefore does not reduce the creditworthiness of the company.
By shortening the time of collection of receivables, the company can have a greater number of business cycles during the year, from which it achieves a higher annual level of income, and consequently a higher final profit.
An increase in the speed of debt collection without increasing the level of indebtedness, a higher level of income, a higher profit in the next business year will be reflected in the improvement of the creditworthiness of the company.
