Case Study Factoring Despite Reciprocal Trading
A partnership business, that are involved with lithographic printing work were seeking a recourse factoring facility for their business.
They had already been declined by other factoring companies as they had contra trading relationships with two of their major debtors.
Contra Trading
Debtor factoring companies normally find contra trading an issue as they rely upon the debts being collectable as security for the funding that they provide. Where a client is also purchasing from their debtors there can be outstanding debts that the customer may offset against the payments that they are prepared to make in respect of the client's sales invoices.
Despite these contra situations, Cashflow Acceleration Ltd were able to successfully find a debtor factoring company that were prepared to provide an invoice finance facility to the client releasing working capital the would improve their cash flow.
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