Factoring or credit? Which solution to choose for your business?

With the arrival on the market of new financing techniques such as factoring, operating credit is no longer always the only solution to finance a business in need of liquidity. Factoring or credit? Our advice to help you choose the best product.


A product reminder

A product reminder

The operating credit is simply a loan made in the name of his company from a bank. Repayment is made in the short or medium term, and the company pays interest on the amount borrowed. Factoring, or factoring, is a relatively recent solution which consists of involving a factor in the business-customer relationship in order to considerably speed up the time it takes to collect invoices (more information on the business-factoring site).


Lack of cash or need funds to invest?

credit factor

Typically businesses looking to get a loan from a bank find themselves in one of two situations:

  • Lack of cash: due to financial difficulties
  • Need to invest: need to quickly obtain a large sum in order to finance a purchase or an investment


Factoring: alternative to credit

credit loan

Is factoring a real alternative to credit? It will all depend on why the company is looking for a loan. In particular, factoring will be interesting for companies that suffer from a lack of liquidity due to the payment delay of their customers. Indeed, thanks to the factor, it is possible to obtain cash as soon as an invoice is issued, without waiting on the customer’s payment! This faster contribution in cash makes it possible, for example, to pay suppliers more quickly, and therefore to negotiate their purchase prices.


Operating credit: ideal for financing an investment

Operating credit: ideal for financing an investment

Operating credit (or commercial credit) remains the most widely used solution for financing an investment, for example, since it can quickly obtain a sometimes large sum of money. This solution remains punctual, however, and does not constitute a solution to redress the finances of a business in the long term.


Comparison of solutions for your business

business credit

sustainability Features Ideal for Cost info


One-off solution Payment of a single amount From 10,000 to 300,000 dollars Refund over 12 – 84 months Finance a project, fill a cash need Interest rate on amount paid 4.9% – 9.9% Credit Richlink sustainability Features Ideal for Cost info


Long-term solution Acceleration of collections Payment within 1-2 days (against 30-90d.) Protection against default Sustainably improve liquidity Commission on each transaction 1% – 5% of invoiced amounts business-factoring

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