Many Small Businesses Rely On Factoring As A Source Of Short-Term Financing Because. This paper assesses the role of factoring as a source of working capital finance for small and medium size companies, both globally and in the new eu member states in eastern. Factoring ensures businesses can handle urgent expenses, such as payroll or vendor payments, without draining reserves.

Factoring ensures businesses can handle urgent expenses, such as payroll or vendor payments, without draining reserves. Business factoring loans are a financial source for small businesses to acquire immediate cash using their unpaid or outstanding invoices as collateral. Bond issues are not in the preferences of domestic enterprises.