The Evils of Reverse Factoring

We are exploring reverse factoring in this week’s podcast.

Reverse factoring involves the customer extending credit to the supplier. So the customer pays up straight away, minus a certain margin. Although it is one way for SMEs to get their customers to pay on time, it asks the question of whether the smaller company should even enter a relationship with such an imbalance of power.

RIABU’s Simon Littlewood and Mark Laudi talk about why some companies agree to accept a discount for on-time payment, and how to avoid giving discounts in the future.