A Study on Supplier Finance Required in Maintaining Active Working Capital Level of Customers: An Example from IDLC Financing Company in Bangladesh

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Naheem Mahtab
Naheem Mahtab
α Independent University Independent University

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A Study on Supplier Finance Required in Maintaining Active Working Capital Level of Customers: An Example from IDLC Financing Company in Bangladesh

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Abstract

Factoring is a simple form of Commercial Finance in which a Small Business which can’t qualify for more conventional financing sells its accounts receivable (invoices), representing money due from its business/governmental customers for the sale of its goods and services to a “Factor” or Factoring company at a discount from face value so that it does not have to wait the normal 30-90 days for its invoices to be paid. In short, Factoring helps a Small Business Speed Up its Cash Flow, thereby enabling it to more readily pay its current obligations and grow. Some people defined factoring as the purchasing of accounts receivable, in the form of invoices, at a discount from their face value. The term ‘Factor’ has its origin from the Latin word ‘facere’ meaning to make or do (to get things done). The dictionary defines a Factor as an agent, particularly a mercantile agent. Factoring has a long and fascinating history, which traces back through several centuries. In the early stages, Factors were itinerant merchants who were entrusted with merchandise belonging to others.

References

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Funding

No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

Ethical Approval

No ethics committee approval was required for this article type.

Data Availability

Not applicable for this article.

How to Cite This Article

Naheem Mahtab. 2015. \u201cA Study on Supplier Finance Required in Maintaining Active Working Capital Level of Customers: An Example from IDLC Financing Company in Bangladesh\u201d. Global Journal of Management and Business Research - C: Finance GJMBR-C Volume 14 (GJMBR Volume 14 Issue C6): .

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GJMBR Volume 14 Issue C6
Pg. 13- 35
Journal Specifications

Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

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v1.2

Issue date

January 17, 2015

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en
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Factoring is a simple form of Commercial Finance in which a Small Business which can’t qualify for more conventional financing sells its accounts receivable (invoices), representing money due from its business/governmental customers for the sale of its goods and services to a “Factor” or Factoring company at a discount from face value so that it does not have to wait the normal 30-90 days for its invoices to be paid. In short, Factoring helps a Small Business Speed Up its Cash Flow, thereby enabling it to more readily pay its current obligations and grow. Some people defined factoring as the purchasing of accounts receivable, in the form of invoices, at a discount from their face value. The term ‘Factor’ has its origin from the Latin word ‘facere’ meaning to make or do (to get things done). The dictionary defines a Factor as an agent, particularly a mercantile agent. Factoring has a long and fascinating history, which traces back through several centuries. In the early stages, Factors were itinerant merchants who were entrusted with merchandise belonging to others.

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A Study on Supplier Finance Required in Maintaining Active Working Capital Level of Customers: An Example from IDLC Financing Company in Bangladesh

Naheem Mahtab
Naheem Mahtab Independent University

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