Investors benefit from high and stable returns while diversifying their portfolios. Moreover the private debt market is growing rapidly due to quicker credit approvals with private lenders compared to banks. This is particularly crucial for companies in need of capital.
Fake invoices from debtors, delayed payments and/or default as well as factoring with/without recourse are typical risks associated with factoring. However sufficient insurance coverage, strong collateral and extensive due diligence can mitigate these risks.
Delayed payments and/or default are typical risks associated with asset based finance. However, sufficient insurance coverage, strong collateral and extensive due diligence can mitigate these risks.
Delayed payments and/or default are typical risks associated with bridge financing. However, sufficient insurance coverage, strong collateral and extensive due diligence can mitigate these risks.
Invescap’s investment solutions are available only to qualified investors.
Availability of working capital
Many enterprises often fail to meet restrictive bank lending criteria or experience excessive approval delays due to higher restrictions on bank credits subsequent to the financial crisis of 2008. By selling their receivables, corporations can obtain essential liquidity on short notice.
As a condition of issuing a loan, banks demand company’s assets as collateral, which could threaten the viability of the company in the case of non-payment of invoices. In factoring, collateral is typically limited to future accounts receivables thus enabling corporations to maintain their activities by keeping their vital assets.
Additional benefits of factoring receivables
Businesses increasingly find factoring a good option because the selling of invoices means quick access to working capital without the risk of engaging in capital operations which could modify the capital structure of a company, therefore avoiding the risks of losing management control.
Investors benefit from bond-like volatility and equity-like returns.