Create liquidity

If you grant payment terms to your customers, you take on the function of a bank. You make concessions and sacrifice because the unwritten laws of the market in your industry probably require payment terms. Yet, by doing so, you reduce your own liquidity. As a result, you have to refinance your own operations until payment of your bills, tap into other sources of liquidity or put aside your necessary investment or expansion plans.

This alone can put a significant burden on your liquidity and consequently your company’s balance sheet. It becomes really critical if the customers overuse the payment delay and pay even later or if it actually comes to total default on receivables. Then your liquidity is seriously at risk.

Factoring & Forfaiting are two important tools here, which allow you to improve your liquidity immediately. And more than that – you can grant even longer payment delays to your customers without suffering liquidity losses.