Factoring
The solution to obtain your capital quickly
without compromising your bank financing.
without compromising your bank financing.
QUÉ ESFactoring
Factoring is a form of financing for companies, mainly for working capital (credit sales or inventories).
Factoring is a contract between two parties (factoring company and client) through which the client transfers to the factoring company account receivables (credits) originated in sales of goods, sales of services or execution of works.
In return, the factoring company provides one of the following services:
- Financing, through the purchase of documents or credits.
- Acquisition of account receivables.
- Run collection management.
- Run the collection.
- Insurance against non-payment by the debtor.
- Coverage against fluctuations in the exchange rate.
- Advice on the financial health of debtors.
ADVANTAGESFinancing of working capital
Through factoring the company manages to finance:
With an alternative source, freeing up bank financing for longer-term needs.
Without increasing liabilities.
Without having to give a collateral (mortgage on a property or pawn of inventories).
At the same terms of your sales.
Getting cash to better negotiate with your suppliers.
Improving liquidity ratios.
VENTAJASEl factoring
Coverage of the risk of insolvency of debtors
Non-recourse factoring allows the company to cover the risk of insolvency of its buyers (debtors).
Currency risk hedging
Factoring can be used as a way to hedge the risk of variation in the exchange rate.
Customer credit rating
Factoring companies have vast experience and extensive information on the credit behavior of a significant number of companies in the economy.
Improved collection management
Through factoring the company transfers not only the ownership of the credit documents, but also the task of managing its collection.
Collection outsourcing
Through factoring, the client entrusts a third party with the function of collecting the documents, saving costs and risks, such as burglary and infidelity of its employees.
Improvement in administrative management
The release of tasks such as collection management and collection itself frees up man-hours in administrative departments that can be allocated to other functions.
ADVANTAGESFactoring
Coverage of the risk of insolvency of debtors
Non-recourse factoring allows the company to cover the risk of insolvency of its buyers (debtors). Insolvency means: suspension of payments, bankruptcy, closure or cessation of activity. This coverage does not contemplate litigation and discrepancies of a technical-commercial nature.
Currency risk hedging
Factoring can be used as a way to hedge the risk of variation in the exchange rate. When selling receivable, the company can transform the liquid received into another currency, leaving its assets in the currency used as a reference or in which its liabilities are denominated.
Customer credit rating
Factoring companies have vast experience and extensive information on the credit behavior of a significant number of companies in the economy. For this reason, the information that the factoring company provides to its clients will be extremely useful for companies when it comes to completing business and minimizing the credit risks of their debtor portfolio.
Improved collection management
Through factoring the company transfers not only the ownership of the credit documents, but also the task of managing its collection. As the factoring company is a third party specialized in credit matters, it usually achieves greater efficiency in collection, reducing payment delays.
Collection outsourcing
Through factoring, the client entrusts a third party with the function of collecting the documents, saving costs and risks, such as burglary and infidelity of its employees.
Improvement in administrative management
The release of tasks such as collection management and collection itself frees up man-hours in administrative departments that can be allocated to other functions.
Asset profile improvement
Many companies need to comply with corporate or regulatory standards that indicate the portion of risky assets they can hold. Factoring can be used to keep risky assets (loans) within established ratios.
DEFINITIONUruguayan legislation
Factoring is ruled by law # 17,202 of 09/24/99.
Non-bank financial company specialized in financing the working capital of companies.
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