Q1 Answer
BlueVine and Capital Plus are some of the factoring companies with good reputation in the world.
Q2 Answer
Both BlueVine and Capital Plus offer service to U.S. business investors and other people who qualify according to their provisions.
Q3 Answer
Provider
Advantages
Factoring is a helps the provider to receive higher profits from their transactions. Factoring companies offer the services at a fee to their clients. This implies that when the companies’ collect the debts from the customers receive higher gains that the cash they provided to their clients. Therefore, factoring is a business that companies can use to earn income.
Factoring Companies enjoy good reputation and image. Factoring companies assist their clients to have a clear understand their customers well. Understanding the customers’ creditworthiness allows the clients to enhance their relationship because they know each other very well. Such pride goes to the factoring company that provides this information. In so doing, they improve the business environment in the world.
Disadvantages
It is a risky business for the provider of the services. The provider may suffer bad debts in case the customers transferred to him do not pay the debts. It is a serious mistake that may lead to the loss for the factoring company (Donini, 2002).
Factoring may be time wasting on the side of the service providers. The factoring companies need to take time and monitor the debtors to make the payments. Sometimes this work may be tedious given the complexity of some of the debtors. Some debtors may be hard to deal with due to their failure to honor the agreements.
Clients
Advantages
Factoring is a time-saving activity to the client. When the client sells the accounts receivables, he or she can save time that he or she could have used collecting debts from customers. The investor can take that time to explore other business opportunities that can help him or her in realizing more profits for the business (Donini, 2002).
Besides, factoring is helped the client to enhance business growth. When the provider receives instant cash from the client, he or she can use it to invest further. In other words, it saves the provider from having his or her capital held by the customers. In so doing, the provider benefits from the further expansion of his or her business.
Finally, factoring plays a great role in assisting the client in understanding the creditworthiness of his or her customers. The factoring company can assist the client to understand how its customers pay their debts. Such information is very important for the client in deciding which customers should get items under credit and who should not.
Disadvantages
It is costly for the client as compared to bank loans. Factoring becomes more expensive to the clients because the services provider has to work with invoices. Although cash is easy to receive by the client, that ease leads to a fee that is higher than the bank rates.
Also, factoring affects the business-customer relationships. The service providers in factoring transactions require the client to transfer the accounts receivable to them. This means that the factoring companies work directly with the customers instead of dealing with the business order. Such a move may look unprofessional and thus, develop a withdrawal problem to the customers. As a result, the customers may look for other businesses do not apply the same (Donini, 2002).
References
Donini, A. C. (2002). Factoring. Rio de Janeiro: Editora Forense.
