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What type of cash flow improvement do factors aim to achieve?

Long-term investment benefit

Immediate cash availability

Factors aim to achieve immediate cash availability by providing businesses with the means to access funds quickly. This process involves the sale of accounts receivable to a third party, known as the factor, allowing companies to convert their invoices into cash without having to wait for their customers to pay.

This ability to unlock cash flow provides businesses with vital liquidity to meet current operational needs, fund growth initiatives, or manage unexpected expenses. The focus of factoring is centered on enhancing a company's cash position immediately rather than on long-term financial strategies, operational efficiencies, or borrowing costs. Such immediate access to cash can significantly improve a company's working capital and financial stability.

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Reduction of operational costs

Lower loan interest rates

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