Faktoriettevõtteks

Faktoriettevõtteks refers to a factoring company or a firm that engages in the practice of factoring. Factoring is a financial transaction where a business sells its accounts receivable to a third party, known as a factor, at a discount. The factor then collects the payment from the business's customers. This arrangement provides businesses with immediate cash flow, which can be crucial for managing working capital and funding operations.

Factors typically purchase invoices from companies that sell goods or services on credit. The discount rate is determined by various factors, including the creditworthiness of the business's customers, the volume of invoices being factored, and the length of payment terms. The business receives a significant portion of the invoice value upfront, with the remainder paid once the factor collects the full amount from the customer, minus their fees.

There are different types of factoring. In non-recourse factoring, the factor assumes the risk of customer non-payment. In recourse factoring, the business remains liable if the customer fails to pay. Businesses often use factoring to improve liquidity, avoid the burden of collections, and mitigate the risk of bad debts. It is a common financial tool, particularly for small and medium-sized enterprises that may have difficulty accessing traditional bank loans or require faster access to funds. The term "faktoriettevõtteks" is the Estonian term for such a business entity.