The old prejudice that factoring clients have a low level of creditworthiness or are even “in trouble” can still be encountered in the factoring market. However, factoring companies pay special regard to their factoring clients’ sound customer and account debtor structure, last but not least out of their own financial interests. Potential new factoring clients will therefore be thoroughly vetted by the factoring company before entering into a factoring contract with them. Only healthy enterprises with recoverable/collectible receivables, solid creditworthiness and profitability are suitable for a long-term factoring relationship. Factoring has rather become a quality trait in customers; clients who use factoring assert this with increasing self-confidence.
Factoring FAQ