Factoring

In a B2B environment, factoring is a primary source of short-term financing enabling companies to obtain immediate payment of invoices owed to them, without waiting for contractual payment terms to elapse. This is a dynamic solution, as it keeps pace with the company's business growth, providing it with scalable cash leverage.

Factoring is a complementary or alternative solution to bank financing.
Factoring is a simple, fast and uncapped solution, allowing you to finance up to 95% of your receivables within 24 hours.
There are different types of factoring solutions that can be tailored to your working capital requirements (WCR).
Factoring allows short-term financing to be granted independently of the sole assessment of the balance sheet.

800 customers

use a financing solution we have set up

€45 billion

in receivables are factored through our negotiation

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Factoring in a nutshell

Factoring is a tailor-made solution that meets your financing needs. It enables you to sell your trade receivables to a factor, which can take over the collection of receivables.

Why choose factoring?

When it comes to cash flow and financing, the priority for Finance Departments is to adjust their plans to incorporate market ups and downs, and to diversify their financial resources and partners. This trend is developing in a context where payment deadlines are weighing heavily on companies' outstandings, and where "classic" bank financing is only partially suited to supporting the dynamics of commercial growth.

Factoring, a scalable financing solution to support your company's growth

Whether you're in a period of development, strong growth, restructuring or cyclical financial difficulty, you can easily increase your sources of financing by assigning the invoices you've issued to a factor. Today, some of the world's leading companies, in terms of financial health, size and reputation, are using factoring to secure their growth.

The various forms of factoring

Balance or line-by-line loading according to the characteristics of your accounts receivable: number of invoices and number of customers
Domestic and/or export which enables you to mobilise all your accounts receivable regardless of their location, both domestic and export
Notified or confidential: you can consider a factoring solution without informing your customers
Collection of receivables handled by the factor or delegated to the company

Factoring can also go further

Off-balance sheet financing is one of the variations of factoring solutions available on the market. This financial technique aims to improve a company's balance sheet presentation by reducing net debt and total assets while adhering to financial covenants. The off-balance sheet treatment of trade receivables has no impact on the company's debt leverage.
Pan-European contracts : these contracts are designed for commercial entities seeking a standardised solution for all the countries they trade with. Present in over 50 countries, AU Group implements international programmes for its clients, considering the specific culture and strategy of each international market.
Supply chain finance : you want to offer your main suppliers a simple, effective solution for financing their receivables. Your suppliers can rest assured that they will be paid, without delay, by the factor, who prepays their receivables to improve their cash flow. In addition, you increase the loyalty of your strategic suppliers by improving your operating margin through the supplier discount obtained.
Syndicated contracts : Reserved for large groups, these contracts have one factor acting as the leader. The leader manages the entire accounts receivable portfolio and distributes the financing among several factoring companies. AU Group provides a multidisciplinary team with in-depth knowledge of your industry to find the most suitable leader.

Factoring is a tailor-made solution that fits your needs

Use cash leverage to support your organic or external growth
Strengthen your cash position in times of stress
Define domestic or export financing
Diversify and secure your sources of financing
Structure a centralised programme as part of a global approach integrating your domestic or overseas subsidiaries
Set up a syndicated arrangement between several factors to increase your financing and improve your cash position
Opt for a deconsolidating format to optimise your balance sheet presentation

Our approach

Ask our AU Group Finance team about setting up a factoring programme. Our experts will support you every step of the way:

In-depth knowledge of factoring and credit insurance
Complete independence from service providers
Selection of the most suitable solution for your company
Negotiation and securing the best pricing and contractual terms

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Frequently asked questions

All the answers to your questions about factoring.

Factoring is a financial solution that enables a company to transfer its customer invoices to a specialized organization (the factor) for immediate financing. This improves cash flow without waiting for customer payment terms.
The principle of factoring is simple: the company sends its invoices to the factor, who pays an advance (around 90% of the amount incl. VAT). The factor can then take charge of collection from customers, or leave it to the company to manage. Once the invoices have been paid, the factor pays the balance, after deduction of its management fees.
Taking out a factoring contract allows you to secure and strengthen your cash flow, without having to wait for customer payment deadlines. It's an effective solution for:
- Obtaining cash quickly and financing business development (investments, recruitment, purchasing).
- Protecting against non-payment (factors can offer a credit insurance solution, or customers can take out their own credit insurance policy).
- Outsourcing management of accounts receivable, in particular payment tracking and collection.
- Saving time, factoring is particularly useful for growing companies faced with long payment deadlines or large accounts receivable.
Factoring is suitable for all companies, whatever their size or sector of activity: VSEs, SMEs, ETIs or major groups. It is particularly well-suited to companies with long payment terms, such as those who do a lot of export business, or those who want to secure their cash flow from business-to-business (B2B) customers. These cash flow needs can be one-off or recurring.
Credit insurance only protects against non-payment, by indemnifying the company if a customer fails to pay. Factoring, on the other hand, not only allows you to finance invoices before they fall due, but also to delegate the management of accounts receivable. The two can be combined for optimum coverage.
The cost of factoring depends on several factors:
- The amount of invoices assigned,
- The annual volume of sales,
- The number of customers assigned to the factor,
- The risk profile of the customers,
- The financial health of the company using the factoring solution,
- The associated services (collection, guarantee against non-payment, etc.) when subscribed by the company using the factoring solution.
In general, it comprises a factoring commission, i.e. a management commission based on the sales entrusted to the factor, and a financing commission calculated on the basis of the drawings requested by the company on the assigned receivables.
- Factoring with recourse: if the factor's customers fail to pay, and if this non-payment is not covered by credit insurance, then the company is responsible for repaying the factor's financing.
- Factoring without recourse: once assigned to the factor, trade receivables are deemed to have been paid by the customer; the factor can therefore never take action against the company, even in the event of unpaid receivables.
Yes, to be implemented, the factoring contract must be validated by the factor's credit committee, which is sovereign. Particular attention is paid to
- Compliance of receivables with factoring requirements (invoicing process, progress billing, etc.)
- The customer portfolio
- The company's financial situation
- Litigation levels or late payments.
Today, there is a wide range of factoring solutions on offer, and many different players. Not all have the same risk position. In the event of refusal, it can be useful to compare several offers or work with a factoring broker to find the best solution.

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