The decision to finance account receivables: the factoring option

Khaled Soufani
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Khaled Soufani: Department of Finance, John Molson School of Business, Concordia University, 1455 de Maisonneuve Blvd West, Montreal, Que., Canada H3G 1M8, Postal: Department of Finance, John Molson School of Business, Concordia University, 1455 de Maisonneuve Blvd West, Montreal, Que., Canada H3G 1M8

Managerial and Decision Economics, 2002, vol. 23, issue 1, 21-32

Abstract: Factoring is a financial service enabling enterprises to sell their accounts receivable to a factoring company in exchange for cash. The market for factoring in the UK has been growing at substantial rates and most banking institutions are now actively involved in providing this service. Little research on the factoring market currently exists and so this paper'seeks to profile the determinants influencing decision making in the UK factoring industry. Using data from an interview-based survey, this paper establishes that the decision to purchase an enterprise's accounts receivable is influenced by the enterprise's size, type of product or service it offers, industry, sector, age, type of customers, financial statement, the management team, operational suitability, collectability and credit notes. Copyright © 2002 John Wiley & Sons, Ltd.

Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:23:y:2002:i:1:p:21-32

DOI: 10.1002/mde.1046

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