Both
Factoring & Discounting require the following:
A business should have a projected
minimum annual turnover of $200,000.
Goods should be sold on normal
credit terms.
There should be a spread of debtors
so that no one debtor is responsible for a large part
of the total outstanding debt.
Discounting customers should have
an efficient debtors ledger and credit assessment
system.
Factoring/Discounting is NOT suitable
for retailers, contractors receiving stage payments, or
business sector with a disproportionate level of trade disputes.
Factoring/Discounting
is most suitable for a business when it:
has rapid sales growth
sells tangible goods or services
is trading profitably, or can demonstrate
emerging profitability
regularly exceeds its current overdraft
limit
is unable to meet large orders
or seasonal peaks
is fully borrowed against fixed
assets
has credit terms with trade debtors
has a suitable credit history
has most sales not on consignment,
or 'sale or return'.
Best
viewed in 800x600 resolution in IE 5.0 & above / Netscape 6.0 - Site
Designed by ICICI Infotech Limited
