Financial factoring, what is it?

Financial factoring is an alternative that allows you to have the accounts receivable in advance to have liquidity in the operation of your activity or that of your company. By means of a factoring contract, the financial factoring company agrees with the client to acquire credit rights that the client has in his favor for a certain price, in national or foreign currency.

Modalities:

1.- The invoice shall not be liable for the payment of the credit claims transferred to the invoicer.

2.- The invoice shall be jointly and severally liable with the debtor for the timely and timely payment of the receivables transferred to the invoicer.

As a general rule, the customer will not receive the total amount of the documents transferred, since the financial factoring company will charge a percentage for the provision of the service. Through this transaction, the factoring company offers liquidity to its clients, that is, the possibility of having cash immediately available TO MEET THEIR NEEDS AND OBLIGATIONS OR TO MAKE INVESTMENTS.

The factoring companies in Mexico are grouped in the Mexican Association of Financial Factoring and Similar Activities AC (AMEFAC), which is composed of 18 associates, of which 14 are Financial Institutions and 4 Financial Companies.

If, as a result of the pandemic and confinement we are currently experiencing, you or your company are considering the possibility of contracting a service of this type, which will allow you to have liquidity to continue operating, We suggest you put all the options on the table and choose the one that best suits your interests, always reading the small letters of the contracts.

In Bandala | Díaz | García we have extensive experience in legal matters, and we can advise you regarding the analysis of the clauses of contracts for this type of services. Don’t waste time and get close to the experts.