For today, we can rare find a person or a company, that does not use credit funds, as it often happens that there is not enough funding and this process becomes inevitable until factoring comes.
Often it happens so, that normal business is not possible without a credit, which may involve any field of activity. But today, there is no need to take a loan as there is factoring. Factoring is very advantageous in situations where the supplier of a product is not able to count or calculate in advance the date on which the funds will be needed. At the same time, those who have faced credit, know that it is given only on the pre-specified period of time and strictly specified sum of amount. By signing the factoring agreement, the supplier guarantees itself to receive sum of money in advance for the goods, if there is a need.
It’s worth knowing that factoring does not specifically regulate the sum of payment in the contract – it can either increase or decrease, all depends on the amount of goods sold. At the same time, the parts entered into a factoring contract can handle an unlimited number of deliveries in one contract, which is quite convenient, as there is a possibility to receive funds for each supply, if there is a need. Factoring by itself is a simple and intuitive process, since the supplier can receive money only after goods delivery.
In comparison with factoring, the typical bank loans are mainly available in almost any need: to purchase real estate, automobiles, household appliances. But it takes time to receive a loan. In its turn, factoring copes with similar problems much easier and faster in procedural terms, and there is no need in each case to take a credit. In any case, such a service as factoring provides good benefits for the supplier of the goods. The advantage of factoring is in the possibility to receive the cash flows that, by increasing of the sales turnover of the supplier, enable to increase the rate of return and the company itself.