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Advantages of factoring: How your company benefits from the sale of receivables
Factoring offers companies of all sizes and industries – whether start-ups, SMEs or international players – a wide range of benefits. Because factoring is far more than just a form of financing: it is a strategic instrument with which you can secure liquidity, minimise risks and free up valuable resources. With Full Service Factoring, you also benefit from numerous services. In addition, the sale of receivables also increases your equity ratio.
The most important advantages of factoring at a glance
- Sales-dependent financing instead of rigid credit lines – flexible and growing with your company
- Immediate liquidity improvement through the purchase and advance payment of existing and future receivables
- Improved balance sheet ratios by reducing the size of the balance sheet – this leads to better ratings with credit agencies and credit insurers
- Supplier discount utilisation possible – thanks to higher solvency and faster availability of funds
- Cost savings in administration, as no separate accounts receivable accounting is required
- Professional receivables management without downtime due to holidays, illness or technical problems
- Reduction of outstanding receivables through consistent, efficient dunning
- Del credere assumption: protection against payment defaults
The three core functions of factoring
In order to remain competitive, SMEs need flexible financing options beyond traditional bank loans. Without sufficient liquidity, neither investments nor attractive payment terms are possible – and this is precisely where factoring comes in.
Secure yourself with factoring:
- Immediately available liquidity Use the funds from the sale of your receivables in a targeted manner to invest in growth, purchase raw materials or expand your competitive advantages.
- Professional receivables management. If you have sold your receivables to us, we will relieve you of your accounts receivable accounting tasks in return. Our experts ensure that payment reminders and dunning letters are sent out on time with the utmost professionalism and sensitivity. If necessary, they also initiate debt collection proceedings.
- Protection against loss of capital due to receivables We protect you against payment defaults. This gives you the freedom to press ahead with your growth plans safely and predictably.
Is factoring the right solution for your company?
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Factoring: The innovative growth driver
Why factoring is the ideal start-up aid for start-ups
Every resource counts, especially in the start-up phase. Factoring provides you with immediate liquidity without having to wait for your customers to pay on time. This allows you to offer attractive payment terms and still cover your costs – a clear competitive advantage.
Receivables management? Let us take care of it.
Many start-ups underestimate the effort involved in professional receivables management – from dunning to credit checks. We take care of the entire process efficiently and discreetly – so that you can concentrate on what really matters: building your company.
The more professional the receivables management, the faster liquidity flows back into the company – and liquidity bottlenecks can be avoided from the outset..
Another plus point: Factoring has a positive effect on your balance sheet. As your receivables are pre-financed, your equity ratio improves. This in turn strengthens your credit rating and increases your chances of obtaining additional financing components – such as traditional corporate loans. Because a better rating convinces banks, investors and funding agencies alike.
Why invoice factoring is worthwhile in the export business
Export transactions are usually riskier than domestic transactions. In addition, exporters often have to wait a long time to receive payment due to long payment terms and long transport routes. This makes the fast liquidity provided by factoring for companies with exports, the guaranteed bad debt protection and the services associated with factoring – from the assumption of debtor management to the daily updated online portal – all the more valuable.
What else makes A.B.S. a particularly valuable financing partner for export transactions? We know the specific conditions and challenges of the respective target markets and can generally offer customised financing solutions. In this context, A.B.S.’s international locations play just as important a role as its broad-based partner network.
Alternative form of financing: How factoring can help in the restructuring process
Turnaround scenarios are almost part of the economic norm. If the framework conditions change fundamentally, it is important to react flexibly. In this situation, companies are often required to reorganise themselves in order to regain their ability to act.
A.B.S. also provides you with experienced financing experts who know what to do when the course has to be set anew. They will also take care of the entire receivables management for you, including the dunning process. With this professional support, nothing stands in the way of your successful reorganisation.
How the advantages of factoring can become a lifeline in estate deferrals
An impending debt-restructuring moratorium presents every company with enormous challenges. After all, how are you supposed to overcome the financial difficulties if the banks are no longer prepared to approve further loans? One thing is clear: even in a debt-restructuring moratorium, nothing works without liquidity.
Factoring can provide the necessary funds as an alternative form of financing for a wide range of industries. They are generated quickly and easily from outstanding receivables. This gives you available capital without having to provide additional collateral. The liquid funds that you generate through the sale of invoices can be used as required for upcoming investments or to settle liabilities that are due.
With this approach, your own creditworthiness is only of secondary importance; customer creditworthiness takes centre stage. This enables you to use factoring for liquidity requirements even if you receive a loan rejection from your bank. With the optional bad debt protection, you also have the advantage that you are no longer liable if your receivables are not paid.
You can even completely dispense with your own receivables management. Our specialists will take care of this for you in a highly professional manner. You can invest the time and money you save in the priority task of getting your company back on the road to success.
"Factoring is an investment in room for manoeuvre, security and growth. Many of our customers quickly realise that they get back twice what they invest."
Evelyne Knutti
Risk Management
