Factoring

Factoring is the contractual relationship between a Supplier and a specialized financial intermediary (Factor), in the context of which the Supplier assigns to the Factor all or part of its accounts receivable against one or more Buyers.

It is a financing tool that businesses use to quickly raise working capital and improve their cash flow without the involvement of traditional bank lending. Factoring is linked to the sales of the Suppliers and their collection φρομ the Buyers.

Factoring in Greece is governed by Law 1905/1990 and is provided by credit or financial institutions supervised by Bank of Greece.

Financing

Following the assignment of receivables and until their collection, the Supplier may receive advance payment as a percentage of the receivables value, thus converting its receivables into cash to enhance liquidity

Accounts receivable management

Assignment of receivables operations to the Factor, who undertakes their complete handling, including sales monitoring, reconciliation of accounts with Buyers, reminder actions to Buyers, and contributes to the resolution of any commercial disputes until their collection

Receivable collection

The Factor handles communication with the Buyers for Accounts Receivable reconciliation and ensures their collection upon maturity

Buyer credit assessment

The Factor provides creditworthiness assessment services for the Supplier's Buyers both prior to the initiation of the relationship and throughout its duration. The evaluation of Buyers relies on contemporary financial assessment models, commercial data, and information, along with historical transactional behavior data

Buyer credit cover

Upon request from the Supplier and subject to certain conditions, the Factor may assume the credit risk associated with the Buyer's financial inability to settle the value of the assigned receivables upon maturity