Transferring credits in a Factoring relationship is a normal part of corporate life, a sign that a company has a valid, modern organisational set-up, meaning it pays attention to how it governs credits and plans the resulting cash flows.
The EU recommends that member states encourage use of Factoring as a tool promoting more effective management of credits arising out of commercial transactions.
People who are not familiar with Factoring sometimes tend to consider it a marginal financial tool or a way of recovering problematic credits, and therefore see resort to Factoring as a sign of financial troubles and poor credit portfolio quality, associating it with difficult circumstances.
But in actual fact only a very small number of companies have trouble with their customers once they have been transferred in a Factoring relationship.