Factoring

With factoring, companies sell their outstanding receivables before they fall due and receive liquidity immediately. What does that mean for you?

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Factoring – key facts at a glance

Factoring gives companies immediate liquidity, because outstanding receivables are sold to a factor before they fall due. Factoring is not public funding but a private financing arrangement.

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Target audience

Companies with outstanding trade receivables
Companies with ongoing, short-term receivables
Companies regardless of legal form
Companies wanting access to their money before the due date
Companies wanting to hedge default risks

Requirements

Outstanding trade receivables
Receivables that are not yet due
Ongoing sale rather than a single invoice
A contract with a factor, that is, a factoring company
A factor licensed by the financial supervisor where a licence is required

Details on Factoring

Factoring is a form of financing and not a funding programme. You sell your short-term trade receivables to a factor, that is, a factoring company, on an ongoing basis. The factor pays you the purchase price for them immediately or very quickly.

The difference from funding programmes is fundamental. In factoring there is no public funding body and no money from public funds. The basis is a private-law contract between you and the factor. No authority decides on the sale of receivables; you and the factor do. There is therefore no funding decision. In Germany, the business is regulated under supervisory law.

What stands out is the immediate liquidity. You do not wait for your customers’ payment terms but have the value of your invoices available beforehand. Depending on how the contract is arranged, the factor additionally takes on the default risk, up to 100% of the receivable sold.

What does a funding advisor do?

A funding advisor is an expert who guides companies through the complex process of applying for public funding and secures the best funding for their projects – from selecting the right programmes through the application to the final report.

At Ignite we work success-driven: we only make you an offer when we are convinced your project is eligible. You are supported comprehensively throughout the process while you concentrate on your core business – we take on the time-consuming part.

Our services as funding advisors

Analysis and identification

Assess company & project
Find the right programmes
Aimed at maximum grants

Strategy development

Tailor-made strategy
Aligned with your goals
Combine programmes

Application and documentation

Complete application drafting
Documents complete & correct
Higher approval chances

Communication with funding bodies

Contact with authorities
Coordination with funding bodies
Representing your interests

Project support and aftercare

Support across the project term
Meeting funding conditions
Disbursement & final report

The advantages of our funding advisory

Time saved

Focus on your core business
The workload sits with us
A faster application

Access to hidden funding opportunities

Lesser-known programmes
Clever combinations
Full funding potential

A higher success rate

Expertise from many applications
Better approval chances
Fewer rejections

Maximising the funding amount

The highest possible funding
Every lever used
More from every project

Legal certainty

All requirements met
Audit-proof evidence
No clawback risk

Your funding – our daily business

5,000⁺

Funding applications per year

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A team of specialists at your service

Dr. ChristianSpengler

Senior Consultant

Frequently asked questions about Factoring

Factoring is designed for ongoing sale. You pass your short-term trade receivables to the factor continuously, not just a single invoice.

Yes, if its activity counts as a banking business or financial service under the German Banking Act (KWG). It then needs a licence from BaFin (the Federal Financial Supervisory Authority). Ask your provider about this.

No. The factor’s licence requirement does not depend on the legal form, and for you as the seller of the receivables the legal form is not a reason for exclusion in factoring either.

That is possible if your contract provides for it: the factor then takes on the default risk, up to 100% of the receivable sold. Clarify this point before signing the contract.

No. There is no funding directive and no funding body for factoring. You receive neither a grant nor a loan nor a tax advantage, but the purchase price for your receivables.