Article
Why factoring matters for the success of small and medium-sized enterprises
If you own a small or medium-sized enterprise, you certainly know what the old saying “time is money” means. Entrepreneurs use their time to develop their business, open new markets, build relationships with existing buyers and suppliers and create a successful working climate in their team. If we tried to calculate the time we spend on these activities, we would surely wonder when we sleep, eat or have a private life.
In ideal business conditions, when we finish a service or deliver goods, our buyer pays us immediately, we pay the supplier, pay our employees’ salaries and settle our other obligations. Reality, however, is very different.
To win business for our company we often make compromises: we accept that the buyer pays us within 60 or 90 days, we accept that we pay for the goods and collect only after the job is finished, and we often find ourselves having to settle our obligations before the inflows we are expecting.
When we face these challenges, the question is clear: “How do we secure financing?”
Banks are the first choice. We all have business banks we work with and certainly already have credit lines open. But banks, too, have their limits, restrictions and ever longer processing times for our requests. Other obstacles to getting financial support also arise: you have only just founded your company, you had a negative business result, you are currently quite heavily indebted, you have no collateral available for new borrowing, or you simply need the funds quickly for the job you are entering to make sense.
What can be done in such situations?
A new factor is needed on the market, a factor that can solve all of this. For the purposes of this story we will call it the X factor, which can be decisive in the development of your business. X faktor d.o.o. is a company that buys your receivables and responds very quickly and simply to your requests to speed up your current liquidity.
If you face any of the challenges above, feel free to contact the financial experts of X faktor d.o.o., who know how to speed up your cash flow and how to secure additional funds that can be the key to your further development.
A factoring company can take part in your business in different ways:
- By buying receivables – On the basis of the invoices you have issued, it pays you the amount straight away, less the fee it charges for that transaction. When the payment term expires, your buyer pays the factoring company the amount of your invoice. By then you have already used the money for new business or to pay current obligations.
- Through reverse factoring – It pays your suppliers for you when you need to buy certain goods or services today, which you will collect from your buyer in 30, 60 or 90 days. In this way the factoring company takes part in the business with you, and you pay the factoring company once the business is paid.
- Through financial advice – Together with you it checks your new buyers or suppliers, works out the best financial structure and adapts the solution to your needs.
Any form of cooperation with X faktor will be a key to success for you, because an expert team with more than 20 years of experience in the financial sector knows how to find the best option to speed up your turnover.
Liquidity matters – especially when it is needed most.
So choose to work with X faktor d.o.o. – your partner for success.
Duško Prešić, director of X faktor d.o.o. Banja Luka
