Aren’t factoring and discounting the same thing?
Unfortunately, the terms ‘factoring’ and ‘invoice discounting’ are often used interchangeably. Factoring actually involves the sale of receivables with a full transfer of title, whereas invoice discounting refers to cases of borrowing where the receivable is used as collateral.
I already have bank loans, so why do I need factoring?
Factoring differs from a bank loan in the following ways:
- in factoring, the emphasis is on the quality of the receivables (which is essentially regarded as a financial asset), rather than on the firm’s credit-worthiness.
- factoring does not involve a loan – it is the purchase of a financial asset (the receivable).
- a bank loan involves two parties, whereas factoring involves three (the seller, the buyer and the factor).
- the factoring company makes a quick funding decision (2-4 weeks), while banks may take up to 6 months to approve a loan.
Why Egypt Factors?
We are the industry experts when it comes to creative financial problem solving. We have gotten our reputation by purchasing notes and creating business financing opportunities in acreative manner.
You can be assured that EGF will always act professionally, in your best interst and with a complete confidentiality.
Our programs are designed to help businesses to stabilize their cash flow, building a platform for growth; our programs can virtually accommodate most of the short term financial requests locally or internationally.
Does Egypt Factors apply its factoring services to any industry?
Factoring companies usually develop preferences for working with certain industries where risks can be managed more effectively. Fortunately, at Egypt Factors we have managed to secure the services of professionals who have the required experience and expertise to structure factoring models that can suit myriad industries. Our current portfolio of industries is considerably diversified and includes the following:
- Packing and Packaging
- Home Textile
- Building materials
when does Factoring apply better?
- Sales on credit terms up to 180 days.
- Continuous business relationship.
- Clear sales title/enforceable receivables.
- Clean/clear performance of the seller.
- No counter-trade.
- Portfolio spread over a number of buyers.
Which customers would be considered as good candidates for accounts receivable funding?
We will factor 100% of your customer base as long as they are credit-worthy. In order to approve your customer base, we will require some details, such as their names, addresses, phone numbers, and the amounts of credit desired for each client. This will save you time when submitting invoices to us.
What should I tell my customers when they find out I am financing my receivables?
You will find that many business-to-business suppliers and customers are already aware of how factoring invoices work. In case you do have customers who are new to the process, we would send these a letter explaining how invoice factoring works.
Should you or your customer do have any other queries about factoring, please don’t hesitate to contact us.