In normal times, factoring is already in great demand by companies, to compensate for payment delays from their customers. But in this period of pandemic, factoring companies have also been able to adapt to support companies even more and avoid them financial problems.
Why is factoring a solution in times of Covid-19?
During Covid-19, many companies may encounter financial difficulties due to their decline in activity. This affects everyone from the end customer to the supplier and to avoid cash flow issues factoring is the ideal solution. Between the deadlines, the delays and the lack of debt to pay, each company must adapt.
The fact of choosing a factor in France will make it possible to have a follow-up adapted to the current economic conditions. This allows businesses and factoring companies to adapt along with government measures implemented during the pandemic.
How have factoring companies adjusted during Covid-19?
Until before the covid, it was necessary to wait for the issuance of the invoice to be able to benefit from the advantages of a factor. Since the summer of 2020 and this until June 30, 2021, the government offers the State guarantee, which allows companies to directly solicit factoring companies and earn up to 45 days of cash.
It will suffice to make the request to a factor, directly upon receipt of the customer’s order. The pre-financing is quickly put in place, allowing the company to buy the necessary equipment and to remunerate its employees. Then, classic factoring takes over, once the invoice has been issued.
It is a solution that allows companies to continue their activity with confidence during Covid-19 and that everyone finds their way into their cash flow.
What are the conditions for taking advantage of the factoring reinforcement system?
There are all the same some conditions to benefit from this aid, first of all, companies must not be in liquidation, reorganization or safeguard proceedings. The characteristics of this funding are set in the decree of September 4, as are the remuneration and the funding ceiling.