"Is Factoring an alternative to bank financing"?
Factoring is an instrument to professionally manage receivables
Factoring is a managerial support and a financial technique, with the purpose of satisfying company requirements of trade credit management.
Factoring involves different services:
- administration, management and collection of credits
- legal support during the collection of claims
- evaluation of customer reliability
- advance of credits before expiry
- completion guarantee
Therefore Factoring is not an alternative to bank credit, but it certainly has a financial component that is a complementary choice to other financial sources available for the company.