Advantages of Factoring

 
  • It meets the business capital needs by turning long- and/or short-term receivables into cash flow against assigned invoices.
  • Since it provides a maturity time for the buyers, it increases the competetiveness in the market.
  • By speeding up the returning rate of receivables, inventory, and commercial debts, it increase the liquidity ratio of the balance sheet.
  • Since the collection of the receivables is undertaken by the factoring company, seller won't have to employ or assigng an employee eclusively fort his job thus will save workforce and time.
  • Contrary to the credit use, factoring process doesn't take place among the banking debts in the passive section of the balance sheet. Therefore it doesn't consume the credit limits, and thus affects debts/equity capital ratio, and equity capital profibility in positive way.
  • Companies who have turn their receivables into cash by assigning them to factorin company will have a potential of fast and controlled growth with continuous and uninterrupted cash flow.
  • With the receivables-turned-cash, companies can buy the raw materials in cash and gain significant discounts that help them in reducing the production costs. Thus business profitability of their company can be increased.
  • By assigning receivable collection and funding matters to the factoring company, managers can focus on production, investment, and marketing matters for future strategies.
  • Ensuring the finance of short-term receivables of the companies, factoring system differs from loans and cause activities only on the assets section of balance sheet. Receivables, inventory, and commercial liabilities are reduced while the operating capital that the business can create is increased. Balance will become more liquid and credibility of the firm is increased.
  • Since they are provided based on the needs and upon the request of the seller, advance payment used from the factoring company against commercial liabilities can decrease the outsıurcing needs of the company as well as the interest rate.
  • Since the cost of the finance obtained by factoring is cheaper than those of commercial loans (late interest), further profits can be made from long- and/or short-term sales.

MARKET DATA

  • CBRT
  • USD Buy | Sell
  • EUR Buy | Sell
  • GBR Buy | Sell
  • Free Market
  • USD Buy | Sell
  • EUR Buy | Sell
  • GBR Buy | Sell
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