What is factoring?

Factoring means than an enterprise will continuously sell its receivables resulting from the sale of goods or services to a factoring company. Thereby, the enterprise receives liquidity immediately from its accounts receivables. The factoring company checks the credit rating of the enterprise’s customers before and during the factoring relationship. It also takes on the default risk within the range of an agreed limit.

Economic and ecological sustainability are at the core of business financing that is also viable in the future. The German factoring association (Deutscher Factoring-Verband e.V.) and its members are therefore closely monitoring and engaged with the issue of sustainability and its various effects on and consequences for factoring.