Question

How could a US business use a “factoring firm” to alleviate any negative consequences of currency exchange fluctuation?

Answer 1

Factoring refers to a transaction in which an organisation sells its receivables or invoices, to a third-party financial company termed as a “factor”. A factoring firm is a privately owned business-to-business company in financing that gives immediate cash in exchange for their unpaid receivables or invoices to the clients. It allows US business to quickly build up their cash flow, take more customer orders, handling payment to employees, and adding more business. Moreover gives free back-office support, such as managing collections from the customers, thus enabling the business with more resources and time to focus on business growth. Furthermore it is based on the quality of the customers’ credit and can also be customized. The US business in this process needs not to wait 30, 60, or even 90 days for a payment for customer, thus assisting to alleviate the negative consequences of currency exchange fluctuation.