Abstract:

Most of the European firms consider access to finance as a barrier to growth even there are a variety of different sources for financing enterprises, internal and external. In fact, the insufficient internal resources determine the European firms (Small and Medium Enterprises - SMEs, in particular) rely heavily on access to external finance in order to run or expand their businesses. Among the external financing products available to SMEs which include bank loans, overdrafts, leasing, factoring, venture capital, business angels etc., factoring has gained more and more importance taking into consideration its main advantages. Thus, factoring offers more than simply finance: through matching finance with professional credit management services, and in some cases credit protection. In the condition of financial crisis, the restrictive conditions imposed by the banks and the low level of liquidities on the market makes the factoring an important financing option for the SMEs.