We’ve already debunked 2 myths about factoring. There’s just one left, but,  before that, go read the two articles here and here.

Myth no. 3: Factoring is bureaucratic.

Factoring involves taking over a trading relationship with a particular partner, and the bank (the factor) needs to understand very well how it works, so it can act properly and in its client’s best interests if insured events occur.

In practice, the factoring agreement mirrors the terms and conditions of the commercial contract/order a client has agreed with its partners, and the factor asks that these be observed, nothing more. The bank’s (the factor’s) role is not to intervene in the commercial relationship, but to make every effort to protect its client’s interests.

Bottlenecks appear when the commercial contracts/orders say one thing and what happens in reality is another. The kind of client who doesn’t recognize the importance of sticking to what was agreed with their partner and has the approach “I know better; I’ve been doing it like this for years” will label the product as bureaucratic.

In reality, if the aspects above are respected and the bank (the factor) understands at the assessment stage how the commercial relationship between the two partners works, running the facility offers automated options that keep bureaucracy to a minimum.

In conclusion, factoring is a product tailored to companies’ needs; what’s needed is simply the willingness to understand its benefits.

At BT, we have a specialized department that successfully manages a significant number of domestic and export factoring transactions. In recent years, the approval and processing flows for these facilities have been automated, so all our clients can use factoring services online. That way, response times have dropped considerably.

And we all know that time = money, right?