Factoring Examples

Some industries, because of the nature of their operations, are especially suited for integration with factoring and have come to rely on it as a regular part of their everyday business:

> Recruitment and Temp Agencies

Recruitment and temp agencies generally have various payment terms set with their clients. However, their temp staff is paid a salary on a weekly basis. Factoring ensures that these companies can operate regularly despite the shortfall of cash inherent in this type of arrangement.

> Haulage

Haulage companies normally have to deal with business customers that require invoices, but payment on this basis occurs at irregular intervals. The companies use factoring to meet the high turnover of expenses related to operations in order to continue providing services to their clients.

This becomes especially important when companies grow and other forms of credit are not able accommodate the immediate infusion of capital demanded by expansion.

> Couriers

Courier agencies pay their employees at regular, short intervals while the bulk of their income comes from large contracts that have long terms of payment. In order to keep up operations in between payments, factoring provides a line of credit to cover the inevitable shortfall of cash.

> Manufacturing

Manufacturers follow the capital-intensive cycle of ordering materials from their suppliers in order to continue producing goods that are in turn bought by their customers on a credit basis. Manufacturers rely on factoring for the funds required to purchase from their suppliers in order to maintain a profitable production capacity.