Micro, small and medium-sized enterprises (MIPYMES) are faced with the urgent need to have liquidity on a daily basis to keep their businesses running, so it is convenient for them to learn about factoring as an immediate way to obtain cash, avoiding all kinds of paperwork and with total security.

Factoring consists of an unconventional form of financing through which a company assigns the credit of an invoice to an entity that offers factoring.

For example, in the case of a businessman, this type of operation makes it possible for his MSME to anticipate the collection of pending invoices from clients, thereby obtaining liquidity in the short term for invoices pending collection.

Given the above, it is worth asking what are the benefits of accessing factoring?

a.- Eliminates uncertainty

Actual payment for invoices can often take 90 days or more. With factoring it is possible to collect invoices immediately after their issuance.

b.- Provides immediate liquidity

The factoring company takes care of paying you in cash the day after the transaction is approved.

c.- Flexibility

Currently there are virtual platforms that also provide access to factoring.

d.- Exchange risk

When the invoice is expressed in foreign currency, factoring avoids the risk of the exchange rate, which makes it possible to anticipate said income.

e.- Low rates

At present there are factoring companies in which your invoices are accepted at an interest rate that can reach 0.99% per month. It must be remembered that factoring as such is not exclusive to large companies.

All entrepreneurs, micro-entrepreneurs or legal entities, who will charge in three months or more for a service provided, have the possibility of selling their credit and having cash available instantly.

Source: Management