Eligibility
Eligibility Criteria
Both Factoring & Discounting require the following:
- A
business should have a projected minimum annual turnover
of $200,000.
- Goods should be sold on normal credit terms.
- There should
be a spread of debtors so that no one debtor is responsible
for a large part of the total outstanding debt.
- Discounting
customers should have an efficient debtors ledger and
credit assessment system.
- Factoring/Discounting is NOT
suitable for retailers, contractors receiving stage
payments, or business sector with a disproportionate
level of trade disputes.
- Factoring/Discounting is NOT suitable for retailers,
contractors receiving stage payments, or business sector
with a disproportionate level of trade disputes.
Factoring/Discounting
is most suitable for a business when it:
- has rapid sales
growth
- sells tangible goods or services
- is trading profitably,
or can demonstrate emerging profitability
- regularly exceeds
its current overdraft limit
- is unable to meet large orders
or seasonal peaks
- is fully borrowed against fixed assets
- has credit terms
with trade debtors
- has a suitable credit history
- has most sales not on consignment,
or 'sale or return'.
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