Frequently Asked Questions (FAQ)

Factoring: How does it work?

Factoring is a short-term financing solution where a business sells its customer receivables to a factor (factoring company) in exchange for immediate payment.

The factor then takes responsibility for collecting the receivables. This process allows the business to improve its cash flow and reduce payment delays.

Why subscribe to a factoring line?

Subscribing to a factoring line allows businesses to improve their cash flow by quickly accessing liquidity through the sale of their customer receivables. It reduces the risk of bad debts, especially with non-recourse factoring, where the factor assumes responsibility for unpaid receivables.

Additionally, this solution frees the business from managing receivables, allowing it to focus on its core activities. Flexible and adaptable, factoring also supports growth by providing immediate funds to seize new opportunities, while preserving the company's borrowing capacity, as it does not increase its debt load

Factoring: how much does it cost?

The cost of factoring is broken down into several key components:

• Management Fee: This is the fee charged by the factor for administering the factoring service. It is typically a percentage of the total amount of the receivables sold and covers the management of client accounts, payment tracking, and collections.

• Financing Fee: This fee applies when the factor advances funds before the client makes the payment. It is often tied to the Euribor and calculated on the amounts advanced, varying based on the risk associated with the receivables.

• Additional Fees: In addition to the commissions, additional fees may apply for services such as credit checks or payment management.

• Guarantee Fund: The factor may hold a certain amount as a guarantee fund to cover potential unpaid debts. This amount, usually a small percentage of the value of the receivables, is refunded to the business once all receivables are settled.

All in all, the total cost of factoring, which can range from 0.1% to 5%, depends on the applied commissions, additional fees, and the guarantee fund, influencing the overall profitability of this solution for the business.

Factoring

Factoring: Who can benefit from it?

Factoring applies to businesses of all sizes, whether they are TPE, PME, ETI or large corporations. This financing solution offers significant benefits, particularly in improving cash flow and reducing the risk of bad debts.

Through factoring, businesses can quickly access liquidity, allowing them to better manage their operating expenses and seize growth opportunities.

Moreover, factoring is adaptable to all sectors, providing valuable flexibility for businesses regardless of their size or industry.

Short term financing

What is short-term financing?

Short-term financing is a solution designed to cover cash flow needs related to a business's operating cycle. This includes financing customer payment delays, purchasing raw materials, maintaining inventory, or covering regular expenses such as salaries and rent. Typically ranging from 1 to 24 months, these loans enable businesses to manage their operations efficiently without having liquidity issues.

How long does it take to set up financing with Pharoix?

Pharoix strives to provide fast solutions. Setup can be completed within 24 to 48 hours for the simplest cases. In general, the process is smooth and quick, thanks to Pharoix's expertise and network of partners.

Which sectors can Pharoix intervene?

Pharoix supports a wide range of sectors, thanks to its expertise in short-term financing. Whether you are in transport and logistics, industry, retail, construction, tech and SaaS, or any other field, we can offer tailored solutions. Our experience allows us to understand the unique challenges of each sector and respond effectively to their needs.