faktorettevõte

A faktorettevõte, often translated as a factoring company or a factor, is a business that purchases accounts receivable from other businesses. This process, known as factoring, involves the company buying outstanding invoices at a discount. The primary purpose of factoring is to provide immediate cash flow to the seller, allowing them to meet their operational expenses, payroll, or invest in growth without waiting for their customers to pay.

The factoring company, or factor, takes on the responsibility of collecting the debt from the seller's customers. There are two main types of factoring: recourse factoring and non-recourse factoring. In recourse factoring, if the customer fails to pay the invoice, the seller is responsible for buying back the debt from the factor. In non-recourse factoring, the factor assumes the risk of non-payment by the customer, although this usually comes with a higher discount rate.

Factors typically charge a fee based on the value of the invoices and the length of time it takes for the customer to pay. This fee covers the cost of purchasing the invoices, the collection efforts, and the risk associated with the transaction. Factoring is a common financial tool for small and medium-sized businesses that may have difficulty securing traditional loans or require faster access to working capital. It can also benefit businesses in industries with long payment cycles or those experiencing rapid growth.