Research Paper (postgraduate) from the year 2019 in the subject
Economics - Finance, grade: 1,0, language: English, abstract: This work
focusses on factoring as a new service in the financial industry. Over
the past fifteen years, an increasing number of small and medium-sized
companies have begun to consider factoring as a practical source of
working capital. Unfortunately, the availability of accurate information
and time has not kept the same pace with the growing interest in this
used form of funding. The financial sector, especially the banking
sector, has been hit by the difficulties generated by the tensions of
debt dependence, which are affecting the banking market assessment and
its ability to create medium and long-term funds. Consequently, making a
comparison with the past, in general, the most valued valuation methods
are the cost of funds which have increased significantly. Current
economic conditions, characterized by credit constraints, make factoring
one of the most favorable solutions for businesses. This funding method
is one of the ways it takes a short time to negotiate and one of the
easiest methods to provide working capital funds. Factoring services
offer an alternative to credit to companies that need little help with
funds. By selling your receivables to a factoring company, you receive a
portion of the forward amount and receive the rest, minus a percentage
that the company receives as a payment as soon as the amount is
collected. You get most of your funds before the customer has paid the
account, instead of waiting until after paying the bill. The factoring
service works to collect accounts receivable so that you can devote your
resources and efforts elsewhere to your business. Through factoring,
businesses can: enable their boards and senior management to make better
informed decisions, proactively manage the provisions and effects on
capital plans, make strategic decisions with a view to mitigating risks
in the event of current under
