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SUMMA FACTORINGFrequently Asked Questions

Who is factoring for?
  • For small and medium-sized companies (SMEs) with financing limitations and who wish to continue growing and improve their negotiating capacity with suppliers.
  • For large companies that need to reduce or eliminate accounts receivable from their assets to improve their liquidity and risk ratios or to pay liabilities.
  • For exporters who need an agile alternative to finance sales abroad.
  • For importers who need to provide payment security to the foreign exporter.
Why use factoring?

Because it allows you to obtain a regular and permanent source of financing, coverage of credit risk and efficient management of receivables.

Is factoring profitable for a company?

Taking into account that factoring provides:

  1. Large financing with no more guarantees than the sales documents
  2. Credit risk coverage
  3. Hedging against currency risk
  4. Efficient and professional collection management
  5. Improvement in collection times
  6. Administrative labor savings

Factoring is an extremely attractive product.

What is the difference between factoring and credit?

Credit affects the level of indebtedness; factoring does not. Credit has its limit in the granted credit line; the limit of factoring is the quality of the assigned invoices. A loan is a slow operation and with many procedures; factoring is an agile and fast operation.

Why appeal to export factoring instead of a credit letter?

Export factoring is an alternative to the bank letter of credit. For those exporters that do not have bank credit or have it limited, export factoring is a highly attractive alternative, especially considering the shorter response times.

Is factoring more expensive than financing through credit?

No, because traditional sources only charge for financing and Summa provides, in addition to this, credit advising, coverage against exchange and credit risks, management and collection of documents.

Does the debtor have the obligation to pay to the factoring company?

Yes, from the moment you are notified of the factoring contract. According to Uruguayan law, a debtor cannot oppose a supplier selling a loan to a factoring company. If, by mistake, the debtor pays to the original creditor, it will be required to pay twice.

How is the factoring relationship formalized?

Through a factoring contract between the customer (seller) and the factoring company (factor), in which the customer sells its receivables to the factoring company. Said sale is then notified to the debtor.

What are the characteristics of the receivables that can be factored?

Factoring focuses on those commercial credits that meet the following characteristics:

  1. That have their origin in sales for the supply of merchandise, provision of services or execution of works;
  2. That the goods sold, the services provided or the works carried out are from the usual business of the client;
  3. That they are sales made to companies;
  4. That the credits are not expired;
  5. That the payment terms are not long-term;
  6. That they are documented in invoices or in securities.
If I use factoring financing, my company may lose reputation?

Factoring is already imposed and understood in Uruguay and is perceived as another form of financing, complementary to bank financing. Using factoring will not lead to a bad reputation.

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