Credit Management Strategies

Credit Insurance v Debt Factoring

Need help? Get in touch.

Is debt factoring the right choice?

Factoring is selling accounts receivable at a discount to a third party – the factoring company. They take on the risk on your behalf, and become responsible for collecting the bill.

What you gain via factoring

With the certainty of payment, albeit a reduced amount, companies can plan with greater confidence.

What you lose, when compared with credit insurance

The first thing you lose is a portion of the amount payable – the discount at which you sold the debt. But you also miss out on all the additional services Coface can provide, that factoring companies don’t:

  • Indemnified debt collection service
  • Up-to-date financial information on 80 million companies worldwide
  • Credit opinions on your current and prospective customers
  • Political risk assessments
  • Exclusive data on economic and business trends

Another consideration is that the factoring company is very likely to outsource the debt collection and the risk of non-payment to a credit insurance company – so you will still have credit insurance in a sense, but at second hand and without the control you would have over your own policy with Coface.

Coface it first and trade with confidence.

To find out how Coface Credit Insurance can help your business contact our team for your free, no obligation quote.

Sign up for the latest news

Related Posts

Resources

Benefits of Credit Insurance

Find out about the benefits of credit insurance and how Coface can help your business grow.

View Resource
Case studies

Nitecrest

Coface’s international reach meant that plastic card manufacturer, Nitecrest, was able to expand its export business and win new orders, without worrying about bad debt.

View Case study
Case studies

Premier Decorations

Coface’s flexible approach allows Premier Decorations to respond to protect its balance sheet during its busiest sales period.

View Case study