Factoring Has A Positive Impact On The Balance Sheet And The Equity Ratio

Factoring positive brings the balance in the roles. More and more, more and more companies have to fight for growth loans and refinancing options. The company credits are denied through the inhibition of the decision by banks, either or must deposit more and more collateral. Since then, it was so that companies have put on bank loans to secure the financing. Through these difficult conditions in raising capital, many medium-sized companies quickly into a financial imbalance. Factoring provides an alternative business financing or revenue funding here.

Factoring provides the Lqiuditat without additional provision of securities. Here, the entrepreneur sold his claims to a factoring company and receives immediate liquidity. Factoring combines 3 services in the product: finance function (purchasing and crediting the claims) service function (transfer of customer management) credit function (assumption of the default risk) factoring and the impact on the equity ratio with the sale of the Receivables from deliveries and services this fall from the balance sheet of the company. The balance sheet is therefore reduced. Due to the reduction of the balance sheet, the equity ratio increased. This in turn has a positive effect on the credit terms. The equity ratio represents a vital statistic in the creation of the Bank ratings. This Bank rating is also crucial to lending.

The Bank rating tells you how the ratio of risk to safety. Also, the Bank rating is crucial for the age of the credit supply and credit terms. The higher the equity ratio is, the sooner is ready to grant a credit to a bank. As in a good Bank rating the risk is low that threatening crises can cause unexpected losses or liquidity bottlenecks. The lower the risk for the Bank is the more favourable terms with the credit. In addition to the impact on the balance sheet, entrepreneurs with factoring get more benefits. For example, by the newfound ability to pay, these are stronger partner. Also, companies that use factoring receivables loss are protected, because the factor assumes the del credere. Shopping benefits arising from the use of discounts. You might have a better negotiation with customers, granting extended payment terms. For more information, also directly to the factoring company.