What does Apex capital corp factoring mean?

Factoring refers to the sale of receivables in order to carry out incoming payments directly, even if the receivables are due later, and to transfer the default risk and monitoring.

Factoring describes the perspective of the seller of the receivables or connecting customers. It concerns the current sale of short-term receivables to a so-called factoring company (factor). The factoring company pays the receivable to companies, which in turn assigns the receivables of the respective customers to the factoring company. The items of factoring are trade receivables from commercial customers, including customers and debtors. With Apex capital corp the solutions come up.

The purchase of receivables from consumers usually does not take place

The respective seller of the receivables enters into a factoring agreement with the factor, which has a term of at least two years. All claims or only claims to specific customer groups are included in this contract. The factoring agreement often provides for the sale of domestic and foreign claims.

Requirements for factoring companies in factoring

The respective seller of the receivables must fulfill certain basic requirements, including the term, the rights that depend on the receivables, the customer base and the creditworthiness of the connection customers. The term of 120 days (domestic) or 180 days (abroad) should not be exceeded for the receivables to be sold. The amount of the claim must be established and the freedom from the rights of third parties. The customer group of the respective connection customer should be constant and not changeable. Also a guarantee of the creditworthiness and the seriousness of the connection customer should be given, since the factoring company must rely on the fact that the demands actually arose and are paid.

Various functions of factoring

Financing function

The financing function is a pre-financing of the company. The factoring company pays the receivables immediately upon purchase. In business transactions, these would only be received by the customers as granted payment deadlines. The company thus receives the corresponding creditworthiness earlier by the regulation of factoring.

Service functions

In the service function of the factor, the most important thing for the connecting customer is the examination of the creditworthiness of his respective customers as well as the ongoing credit monitoring. In this way, the follow-up customer can largely do without his own debtor management.

Various factoring forms

In the case of genuine factoring, the factor assumes the risk and thus the risk of bad debts. If the function is not taken over, it is a fake factoring. Standard factoring occurs when a factor takes over the financing and the service functions when purchasing receivables.

Maturity factoring is the name given to the fact that as soon as a factor takes over only the collection of the receivables at maturity and thus makes the counterpart value of the receivable counter value available to the subsequent customer only after receipt of payment. In this way, the maturity factoring eliminates the assumption of the financial function as well as the function by the factoring company.

In the case of open factoring, the assignment of the receivables is displayed to the debtor, so that each invoice must bear the reference to the sale of receivables. Furthermore, when introducing factoring, all debtors are informed about factoring.