FAQ
01. What is factoring?
Factoring is the ongoing sale of receivables from a company's goods supplies and services against its customers to a factoring institute.
02. What factoring variants are there?
Various product variants can be distinguished depending on the characteristics of the services (financing, security, service).
03. What does "real" and "disclosed/undisclosed" factoring mean?
In real factoring, the factor irrevocably purchases the receivables and takes the risk of default. For many years in Germany genuine factoring was offered almost without exception. Real factoring is also known as non-recourse-factoring. In disclosed factoring, the sale of the receivables is made known to the customers of the factoring customer. In the case of undisclosed (confidential) factoring, on the other hand, the debtors have no knowledge of the sale of the receivables.
04. What are the prerequisites for factoring?
It is important for the use of factoring that the receivables are free of charge and the underlying deliveries and services have been provided in full.
05. How much liquidity do I get through factoring?
After the service has been performed, the company issues its invoice to the customer as usual. At the same time, the company sends the invoice copies to the factor using an electronic interface. The factor pays up to 90% of the amount to the factoring customer immediately after receipt of the invoice. The factoring customer can thus have the liquidity within 24 hours.
06. Do all customers need to be involved in the factoring solution?
With us, it is possible to include the entire accounts receivable as well as part of the debtors. In consultation with you, we can find a range that meets your requirements
07. What documents are needed to assess a potential partnership?
The documents required for the audit are similar for all factoring providers. These are, on the one hand, documents attesting the creditworthiness of your company and, on the other hand, documents for assessing the quality of your claims. Examples: the last two annual financial statements of your company, an open item list from your accounts receivable.
08. How quickly can a factoring be implemented from the initial date?
After an appointment with you and subsequent offer acceptance, a credit decision will be made within two to four weeks. After this, it takes about one week for the contract to be drawn up and signed. A further two weeks can be scheduled for the subsequent operational implementation.
09. How does protection against bad debts work?
The factor buys the receivables and accepts the risk of default, using a commodity credit insurance or hedging itself through the FCI network.
10. What does factoring cost?
The costs for factoring are divided into different components. How high the sum is depends on basic data such as the annual turnover, number and sum of the invoices and the creditworthiness of the company. Depending on the factoring form and type, factoring fees, interest rates and other fees are charged.