Q1 - What is factoring?
Factoring is an ongoing arrangement between the client and the factor, where the sales of goods and services are made on open account terms and the invoices for the same are assigned to the factor regularly for the purpose of funding, collection and sales ledger administration. Factoring involves a long-term relationship between the buyer and the seller with the whole turnover being assigned to the factoring company.

Q2 - What are the types of factoring arrangement?
There are basically two types of Factoring arrangements:
1) Domestic Factoring- If you are selling in India.
2) International Export Factoring- If you are exporting form India.

Q4 - How much advance can I get?
Advances are made as a percentage of invoice value based on criteria, such as, quality of receivables, number and quality of the buyers and your requirements. Typically 80 % of invoice value is advanced.

Q5 - Will factoring not create misunderstanding between me and my customers or the impression that I am in financial difficulty? 
No. Worldwide, factoring volume is more than USD 700 billion a year, spread over nearly 60 countries and covering more than 1,00,000 businesses. Particularly in developed countries, factoring is an accepted way of conducting business.

Q6 - How will I be informed of my customer's payments?
You will get regular statement of accounts. For export factoring, as soon as our correspondent factor receives the payment, we will be notified through a speedy electronic medium, using the EDIFACT, or standard international electronic data interchange factoring network via satellite. In case of domestic factoring, we will inform you directly.

Q7 - Do I have to provide any other security besides invoices in factoring? 

Generally, you need not provide any additional security. However it depends on every individual case and different parameters. 

Q8 - When do I get paid under factoring?
A prepayment advance is given to you on the submission of the relevant documents and invoices and the balance amount is paid on actual receipt of the payment from the buyer.

Q9 - Can I get advances on my invoices through factoring and get funds from other traditional sources at the same time?
Yes, you can avail advances from your traditional sources of funding alongwith factoring services. However, we will only make the advances on the debtors against which you have not availed funding from any other institution.

Q10 - Which type of industries are suitable for factoring?
A large number of industries are now covered under factoring, including automobiles, pharmaceuticals, textile, garment and engineering. In addition to the manufacturing sector, the services sector industries, such as, travelling, telecommunications, software services and so on are also suitable for factoring.