Factoringettevõtted

Factoringettevõtted, often referred to as factoring companies, are financial institutions that provide businesses with a service known as factoring. Factoring is a type of financial transaction where a company sells its accounts receivable, or invoices, to a third party, the factoring company, at a discount. This provides the selling company with immediate cash flow, rather than waiting for their customers to pay their invoices.

The primary function of a factoringettevõte is to purchase these outstanding invoices from businesses. The factoring company then takes on the responsibility of collecting the payment from the business's customers. In return for this service and the advance of funds, the factoring company charges a fee, typically a percentage of the invoice value, and potentially interest on the advanced amount. This fee covers the risk the factoring company assumes and their administrative costs.

Businesses utilize factoring for various reasons, most commonly to improve liquidity and manage working capital more effectively. This can be particularly beneficial for small and medium-sized enterprises (SMEs) that may struggle with long payment terms from their clients or face seasonal fluctuations in their cash flow. Factoring can also help businesses avoid the need for traditional loans, as it is based on the value of their receivables rather than their creditworthiness alone. The factoring company may also offer additional services such as credit protection and sales ledger management.