Opportuniti es and pitf alls of factoring in relieving insolvent companies and the economy.

Increased competition on the market, as well as the eff ects of the global crisis put the vendors in a position to grant all their customers longer payment terms. Even with the extending of terms for payments, customers are not able to carry them out causing the insolvency of many legal entities. Factoring as a specific and alternative form of fi nancing is one of the solutions to this problem that provides the ability to sell receivables to specialized fi nancial institution-factor. When using factoring, all of its advantages and disadvantages have to be taken into consideration. It is necessary to analyze the cost of factoring and decide whether to proceed or not with this arrangement. [ABSTRACT FROM AUTHOR]