Factoring and the credit crunch

Although it seems that the big bank owned factoring companies are feeling the pinch at the moment the level of enquiries being received by Factoring Solutions is still being maintained.

It is traditional in times like this for the larger companies to tighten up their own liquidity by slowing down payments to suppliers and this in turn is causing the smaller companies to look to factoring or invoice discounting to free up their own working capital.

We are also noticing an increase in enquiries from clients of the less efficiently run factoring companies as their poor credit control policies have an even more painful effect on cash flow than usual.

When economic times are tough there are still winners and this time it is the more service oriented factoring companies who are doing better as they are the ones receiving the benefit of clients transferring from their poorer performing competitors.

What do you think?