Only where factorability is present, this facility is suitable. Factorization is not suitable in the following cases :
- where large volume of cash sales take place.
- engaged in speculative business.
- selling highly specialised capital equipments or made-to-order goods.
- where credit period offered to the buyers is more than 180 days.
- where there is Consignment Sale or ‘Sale or Return Arrangements’.
- where sales are to the sister / associated companies .
- where sales are to the public at large, etc.