Hungary Remains Strict On Factoring

Factoring is an increasingly popular product of banks that appeals to corporate clients of whatever size as it provides liquidity to the clients and stable cash flow. The factoring is usually structures in a way that the vendors of the client do not receive information on the factoring, the bank stays in the background; the relationship between the client and its vendor remains intact. In practice, this means that the client continues to collect the amounts the vendor owes, although such amounts do not belong to the client anymore. Also, it is not uncommon that even the soft workout stage stays with the client in case the vendor is in delay with its payment obligation; i.e. the client will be obliged to chase its vendor for the money.