Factoring
Are you struggling with cash flow constraints, or looking to expand your business? Factoring offers a solution. By selling your outstanding invoices to a factoring company, you can receive immediate cash, improve your financial flexibility, and manage risk more effectively.
Your benefits at a glance
- Boost liquidity: access immediate cash to meet financial obligations
and seize growth opportunities. - Reduce payment periods: improve your cash flow and financial flexibility.
- Enhance solvency: strengthen your financial position and attract investors.
- Expand into new markets: mitigate risk and build successful business relationships
- Optimise receivables management: streamline your processes and reduce bad debt.
What is factoring?
Factoring describes a process where a company sells all or some of its outstanding accounts receivable to a factor (factoring company) and receives an immediate advance payment in the amount of the receivables. Its customers’ payment behaviour has no material impact. The company can also use this method to protect itself against debtor risk. In the event of the customer’s financial default or bankruptcy, the amount due under the assigned receivable is secured. This enables a company to minimise risks in connection with expansion into new markets, and to build successful business relationships with new clients.
The flow of liquidity resulting from factoring means that a company can also pay its own bills more quickly and therefore benefit from discounts and rebates for cash payment. The company has greater financial flexibility, and is able to take advantage of current market opportunities and finance growth investments.
The supplementary liquidity generated by factoring generally also reduces short-term borrowed capital. This is reflected in a balance sheet reduction and therefore an improvement in the capital ratio, which is a key factor when assessing solvency.
Based on the stable foundation provided by the Crédit Mutuel cooperative group, Bank CIC acts as a representative of Crédit Mutuel Factoring (CM Factoring) in Switzerland. CM Factoring is part of the Crédit Mutuel group and specialises in receivables management. Its dynamic approach makes it one of the main companies currently providing factoring services.
How does it work?
Assignment of receivables to CM Factoring, which assumes responsibility for their collection and management and makes an advance payment in the amount of the receivables, even in the event of the debtor’s temporary or permanent inability to pay. The factor may pay all or part of the assigned receivable.
Who is factoring for?
Factoring is a financial service typically used by medium to large companies in the services or industrial sectors.