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:
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rationalization of payments to suppliers, resulting in economies of scale in administration
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possibility of agreeing with the Factor on reversal of economic payments emerging out of relationships set up with suppliers under the agreement
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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.