Factor Advantages
For Suppliers:
It reduces the credit risk of the seller.
The working capital cycle runs smoothly.
Improves liquidity and cash flow of the organization.
Cost reduction, through maintenance of the sales ledger, collection & administrative fees.
It reduces the need for the introduction of new capital.
For Purchasers:
Obtaining favorable terms through having a open account terms that will improve the cash flow.
Increasing purchasing power through increase the purchase volume without being committed to banking facilities conditions.
Increasing the creditability with suppliers.