Is factoring similar to discounting?
Factoring is a word often misused synonymously with invoice discounting. Factoring is the sale of receivables with a full transfer of title, whereas invoice discounting is borrowing where the receivable is used as collateral.
I have Bank Loans, why do I need factoring?
Factoring differs from a bank loan in three main ways:
First, the emphasis is on the quality of the receivables (essentially a financial asset), not the firm’s credit worthiness.
Second, factoring is not a loan – it is the purchase of a financial asset (the receivable).
Third, a bank loan involves two parties whereas factoring involves three (the seller, the buyer and the factor).
Finally, the factoring company makes a quick funding decision (2-4 weeks), while banks may take up to 6 months to approve a loan.
Do Egypt factors apply the factoring services on any industry?
Factoring companies often develop preferences for working in certain industries where risks could be managed. Lucky Egypt Factors was able to acquire experienced professional staff members that successfully build factoring models that suits many industries, where currently we are exposed to a well diversified portfolio of industries such as:
2. Packing & Packaging.
Is the factoring process complicated?
The factoring process is easy, very simple and could be accomplished quickly:
• Fill in a complete application form through the (instant quote).
• Our credit department will call you to set a meeting (upon matching our criteria)
• Presenting the necessary documents to proceed with our credit study as follows:
o Historical financials for the last three years along with the next year projections.
o List of customers and suppliers (names, payment terms and historical ledgers)
o Sample of the invoices and its related documents (like P/O, agreement and BOL).
o Having an overview of the business activity, cycle, process, products, management, shareholding structure, current status and previous achievements.
• Upon approving the business proposal on a timely manner, another meeting is set to sign the factoring contract and starts assigning the receivables.
What information will you need from my company to begin the accounts receivable funding process?
A short application, your company’s most recent accounts receivable and accounts payable aging reports, a master customer list (turnover structure) and a sample invoice.
Which customers would be good candidates for accounts receivable funding?
We will factor 100% of your customer base so long as they are credit worthy. In order to approve your customer base, we will need their names, addresses, phone numbers and the amounts of credit desired for each client. This will save your time when submitting invoices to us.
What should I tell my customer when they find out I am financing my receivables?
In fact, many business-to-business suppliers and consumers are aware on how factoring invoices work. In case your customer is new to the process, our company would send a letter explaining how invoice factoring works.
If you do have any question about factoring please don’t hesitate to contact us at (firstname.lastname@example.org) or click here.