The factoring agreement is usually 10 pages or more and can seem overwhelming at first. The following terms are included in all factoring agreements that you need to check and understand: conversely, the form of factoring, in which the name of the factor is not mentioned in the invoice issued by the manufacturer. In such a case, the postman keeps the customer`s sales book and the debts are realized in the name of the company. However, control is in the hands of the postman. Export factoring, or known as cross-border factoring, involves four parties, namely the exporter (customer), the importer (customer), the export factor and the import factor. It is also called a two-factor system. Once the factoring company has approved the solvency of the company, the factoring relationship can begin. After the company has forwarded the claim to the factor, the factor verifies the account with the debtor. If it authorizes the account, the Factor agrees to transfer the payment to the seller, less its service fee on or after the due date, depending on its agreement with the seller. To learn more about factoring types, click here. In finer terms, factoring is a relationship between the factor and the customer, in which the factor acquires the customer`s receivables and pays up to 80% (sometimes 90%) of the sum immediately at the time of conclusion of the contract. The factor pays the customer the balance, i.e.

20% of the amount that includes financing and operating costs, when the customer pays the commitment. Maturity Factoring is a niche form of financing for small businesses without debt collection and debt collection services. Business owners can establish more predictable cash flows, outsource their receivables division, and establish a relationship with a factoring company. Apart from these situations, collection factoring is lower than conventional invoice factoring solutions. This article focuses on the two types of factoring, namely advance factoring and maturity factoring. Factoring is a financial service used to obtain funds in the company, with the business entity selling all its receivables to an external agency with a discount. The external agency is designated as a factor. In this article, we will talk about Advance and Maturity Factoring.

First, it is likely that your company will receive a letter of offer (it is not a contract) from the postman that contains some, but not all, terms and conditions that may be included in the factoring agreement. This letter of offer usually requires your signature and a deposit. The factor will then send you the proposed factoring documents, including the factoring agreement, personal guarantees (if the factor advances), a secretarial or management certificate (depending on whether your company is a capital company or a limited liability company), a proposed communication to your customers that your company`s receivables have been attributed to the postman and various related documents and Agreements. . . .