Most self-employed people are afraid of losing liquidity. And all this because the payment terms for invoices are increasing more and more often, which means that the company that issued it must wait a long time for money. Fortunately, today you can support various financial products that help you patch the financial hole and regulate your liabilities on an ongoing basis. Nowadays loans are of the greatest importance as well as increasingly popular factoring .
Which of these products is better? It is difficult to answer this question, but a lot depends on the specific situation. And since companies use credit and factoring, they have good reason to think that one of these solutions is better for them. Certainly with the loan, we must take into account the fact that in order to get it, we must have so-called “Creditworthiness”, we must somehow secure the borrowed money, etc. And of course, the loan generates costs in the form of commission or interest. But there are some drawbacks to factoring, which are primarily the service costs. However, it should be immediately stated that due to the fact that there are more and more companies offering factoring in our country, the costs related to this product have dropped significantly and are often lower than the aforementioned bank loans. The fact that it does not raise the debt of the company as it makes a loan is certainly a big advantage of factoring. Therefore, it does not reduce the credibility of the company in the eyes of contractors or banks. For sure it also has the advantage that the money we receive from the Factor can be used for any purpose. However, in the case of a bank loan, we must allocate the money to the goal indicated in the application. The procedure related to factoring looks a bit simpler and the number of documents needed is definitely reduced. New ventures can also benefit from factoring, which is unlikely in the case of bank loans.
Is better then a loan or factoring? Each entrepreneur must answer this question individually. Besides, there is nothing to prevent one company from using both solutions, depending on the current financial situation. The choice can help us at http://kredytpodkontrakt.pl/porady-kredytowe/kredyt-czy-faktoring-czego-finansowac-biezaca-dzialalność/ , which describes in detail the differences between credit and factoring.