Does the use of a factor impact the relationship?
Of course not, the seller of the debt is provided precise information on all procedures and occurrences and is involved in all-important decisions in the case of full-service factoring (i.e. the debtor has been informed about the assignment of the debt). If it is a 'confidential' procedure (i.e. the debtor is not informed of the use of a factor) the entire processing remains with the seller of the debt.
Isn't factoring far too expensive?
No, the interest corresponds to the interest rates for short-term cash loans. If the receivables risk and the receivables management is taken over by the factor, a factoring charge applies, which is oriented on risk and expenditure.
What are the benefits of factoring for a medium-sized company?
Outstanding receivables often represent as much as 20-35% of the balance sheet totals of small- to medium-sized companies. Factoring can turn outstanding receivables into immediate liquidity. If a factor takes over the debts, the company is fully insured against receivables outstanding and can also save costs for its own receivables management.
Do banks have reservations towards factoring?
No, on the contrary. Factoring companies are generally subsidiaries of banks and supplement the finance portfolio of their shareholders.
A factoring company cannot and does not intend to take over the functions of a house bank.
How does the use of a factor affect the rating of a company?
Factoring improves the liquidity and profitability situation of the seller of the debt in a sustained manner. The use of factoring leads to a balance sheet contraction. The decline of trade payable results in an improvement of the equity ratio. As the factor also takes over the risk of default the creditworthiness of the company as a whole improves, thus also achieving a better valuation with regard to the rating.
What is the minimum sales total that must be achieved?
We offer factoring to companies with a minimum sales total of
€5 million per year.
Do you also purchase debts against private customers?
In principle, yes, however, this is a matter that is decided on an individual basis.
How high is the finance ratio?
We finance debts up to 90%. The finance ratio is dependent on the deductions, the agreed premiums and defences common in the relevant industry.
How does factoring impact the balance sheet?
Factoring leads to a balance sheet contraction. The equity ratio and other balance sheet ratios improve as the trade payables are reduced. This is especially important for many companies, particularly because of Basel II. After all, outstanding receivables can run up so quickly that they can pose a serious threat to the balance sheet of a company. Besides, more and more debtors are demanding extended terms of payment.
Does PB Factoring also offer "non modification factoring"?
Of course. We can offer different product variations. In this case the factor remains hidden for the debtor. The seller of the debt retains the entire processing. Our specialists are happy to provide you with further information on this.
