Today, there are many questions about the concept of factoring and its advantages. On these issues, we held a short conversation with Abdusamad Sultanov, head of the Factoring Services Department of "Microcreditbank" JSCB...
1. What is a factoring service and what are its advantages for entrepreneurs?
In the Civil Code of the Republic of Uzbekistan (Chapter 42, Articles 749-758), the concept of factoring is given, and factoring is a financial service in return for the assignment of a monetary claim to another person. Or, to put it simply, factoring is the exchange of future earnings for current cash.
Factoring can be established by banks and other credit institutions as financial agents. Factoring has a number of advantages, including:
- collateral is not required (debitor's debt is considered collateral);
- continuity of working capital of entrepreneurs is ensured;
- no targeted use of funds is required.
2. What are the types of factoring services and how do they differ from each other?
There are several main types of factoring services:
Traditional, reverse, single-factor, multi-factor, with the right of regression, without the right of regression, open and closed types.
Traditional factoring is the initiator of factoring - an entrepreneur who supplies goods
Reverse factoring is an entrepreneur-buyer
One-factor is used in local factoring practices
Multi-factor is a service that meets international factoring practices.
3. What is the difference between factoring and credit?
- Factoring services and credit practices are different.
Factoring services are provided within a short period of time, and loans are issued within 1-5 days. Also, collateral is not required in the factoring service, and collateral is a condition for the loan.
4. Where should you contact to use the factoring service and what documents are required?
"Today, factoring services are established in all commercial banks. In particular, our clients can contact the nearest branch of the bank. Today, commercial banks have expanded access to factoring services using integrated electronic platforms.
At this point, let me tell you about who needs factoring services...
Representatives of corporate, small and medium-sized businesses, manufacturers, and trading companies.
Therefore, factoring services ensure the continuity of entrepreneurs' working capital and, most importantly, the continuity of production processes.
Factoring services are primarily used in deferred payment transactions and allow businesses to quickly access financial resources.
You can also learn about the factoring service of MKBANK here.
Bank Information Service
See also
The annual reporting meeting of the WE-Finance Code initiative was held.
