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Factoring and Confirming: two tools that banks don’t want you to know about

In the financial world there are many solutions, from structured products to common standardized solutions such as a credit card or a free investment loan.

However, little is said about one of the most powerful financial leverage tools for companies today: FACTORING.

Although factoring is one of the oldest financial products in the traditional banking and non-banking system, it is one of the least used due to lack of knowledge of its benefits for micro, small and medium-sized entrepreneurs.

Of course, these tools have been left for large companies and corporations that have taken advantage of their benefits for many years.

Factoring is nothing more than the anticipated purchase of a future income flow, in other words, selling on time and collecting cash by paying a commission to the person who expects the payment or runs the risk of a potential non-payment.

Confirming is a similar financial solution, but on the supplier’s side, in other words, buying with a cash price and paying in installments.

These two tools not only improve the company’s cash flow, but also help to avoid burdening the company’s debt capacity.

Likewise, they are short-term financing solutions that allow entrepreneurs to have a margin of maneuverability so that they do not fall into defaults that could harm the development of their business.

And you: Did you already know about these two financial products?

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