The role of factoring companies in the market of any services and products is noticeable and significant. In particular, the work of these organizations is based on the fact that they lend to suppliers, buying short-term accounts receivable, which is usually not more than 180 days.
Usually, in the operation of factoring involves three persons:
- The factor (buyer of the requirements) – factoring company or Bank;
- Creditor (supplier);
- The debtor (buyer).
In certain cases, may be also a fourth party, usually an intermediary (for example, a company that provides a place or e-platform for transactions).
Source of income (functional load)
Factoring company enters into a contract with the product provider that the payment documents for payment of deliveries will go exactly to the factoring company. The factor provides discounting of these documents and pay the customer up to 90 % of the set money amount. Further, when the buyer repays the cost of the goods, the factoring company pays the remaining amount to the supplier, but deducts the interest for the loan and a Commission for their services.
As is clear, the profit of the factoring company lies in these “percent for the credit and services”, and, if to participate in larger transactions, the percentage, by itself, will be too considerable. This business is one of the most profitable in the world, and therefore the ownership of the factoring company automatically brings You closer to success.
Assistance in obtaining business
To get share of the market is not necessarily to register a new legal entity, it is enough to buy the factoring company, referring necessarily to lawyers. Why lawyers? And whom else will You trust the process of transferring rights to the company?
Buy the factoring company is very widespread among businessmen around the world because it allows:
- To save time, what is important for every business person (if we’re talking about buying a factoring company, the future owner hardly squandered time simply, and lawyers understand this like no other);
- See similar offers throughout the market, what is impossible, if you look for individual sellers;
- Quickly get the full rights for the company and by law (it is completely ensured the corporate law experts).