WHAT IS FACTORING
- Factoring is discounting of your receivable thereby converting your credit sales into cash sales in on time.
- we purchase your receivables with recourse basis and giv e you immediate credits up to 80% to 90% of the value of invoices.
- On due date the buyer makes payment directly to ‘Factors’ and thus liability is cleared.
- Thus Factors ensures smooth funds flow to you.
HOW DOSE FACTORING WORKS
- Customer places order on the client.
- Factor fixes Customer Limits.
- Clients delivers goods and invoice to customer with notice to pay factor.
- Client tenders copy of invoice to Factor.
- Finance of 80% to 90% of invoice value.
- Factors sends monthly statements to customers.
- Factor follows up and reminds if unpaid bye due date.
- Customers make payment to Factor.
- Factor releases balance amount to the client.
BENEFITS FACTORING
- Reduces working capital cycle.
- Improves cash flow and liquidity.
- Helps in improving your turnover.
- Better credit management.
- Improves profit and makes your balance sheet healthier.
- Strengthens your bargaining power with your suppliers/ creditors.
- Hassle free processing for availment of limit.
- Complimentary to WC limits availed from Banks.
- Follow up each invoice by the Factor & Collection of dues.
- Providing “Off Balance Sheet" Finance.
- Improved current Ratio, Gearing Ratio and better turnaround period.
