Companies of all sizes use factoring. It is a common business practice across many industries. Factoring has a large presence in transportation, pharmaceuticals, textiles, manufacturing, wholesale and distribution, service providers, etc.
It depends on your company’s unique business needs. Some companies factor all of their invoices while others factor only invoices for customers that take a longer time to pay.
Factoring is not a bank loan. The emphasis is on your customers’ invoices, not on your balance sheet. Factoring provides a steady flow of funds whereas bank loans are often one lump sum. Factoring companies can also assist with the credit and collection functions, which help improve your company balance sheet.
Factoring companies are regulated by Financial Regulatory Authority “FRA” & governed by the Factoring Law no. 176 for 2018.
Customers usually complete a short application form. After that, you may provide a current aging report and a few other basic documents.