TRENDS OF THE FACTORING TURNOVER IN INTERNATIONAL COMPARISONS

Abstract

The factoring scheme was developed by the competition between the market operators and the need for the most favourable conditions of sale. The seller is constrained to provide loans on a broad scale therefore the seller may have liquidity problems. In cases of this kind, the seller can apply to a factoring company in order to access sources, instead of a bank loan. The factoring service has a price. Decision of the financial managers can largely contribute to choosing the appropriate funding form to retain the continuous liquidity situation of an enterprise. Aim of the article is to present the main tendencies of the factoring turnover in international comparisons, highlighting the characteristics of the financial service by its direction, sectorial distribution and customer size in Hungary. It has been estimated that the factoring financing approaches 10% of the short-term loan stocks of SMEs required from banks which indicates that the factoring is now far beyond the marginal financial service but it is an essential element of the short-term financing toolkit.

Keywords

• Financial service
• Factoring
• Lending
• Liquidity