In Indirect Factoring, it is the transferred debtor who proposes resort to factoring services. This approach has traditionally been used in relations with major industrial groups, resulting in agreements - in many cases exclusive agreements - with the Factor which may also be extended to medium-sized debtors.
On the basis of preliminary assessment of the line of credit attributable to a transferred debtor, the debtor prepares a service proposal to submit to suppliers in agreement with the Factor which offers a number of substantial benefits for the debtor's business:
rationalization of payments to suppliers, resulting in economies of scale in administration
possibility of agreeing with the Factor on reversal of economic payments emerging out of relationships set up with suppliers under the agreement
possibility of using the factoring tool, with or without recourse, as a tool in business negotiations in order to obtain more advantageous terms of payment and/or more competitive purchase prices.