Financing with Receivables: Factoring, Securitization and Collateral

Abstract

Short term financing is vital for the financial survival of any company, because very often they are facing deficits of cash during their activity. Therefore a company has to identify the optimal solutions in order to cover those (temporary) deficits. A good solution to this problem is the financing with receivables using factoring, securitization and collateral. In this paper we try to analyze how this types of financing works and which are their advantages and costs. Also, we developed a reasoning pattern in order to evaluate the best receivables financing alternative for the Romanian companies.

Keywords

• Short term financing
• financial management
• liquidity