Case 1:
If the customer is Big and credible and is bullying you by not paying on time:
Factoring without recourse, i.e. palm off the receivable to one of the unsuspecting PSU factors
Case 2:
You are big and you want to fund your vendors:
Vendors would discount your bills and Banks will look to you as a fall back option
Case 3:
You are big and have a hot product and want to fund your channel partners
Channels could borrow from a bank and pay you and if they default, you remain a back stop.
One side of the working capital equation is bloated, one could be creative; if its both then you are in a terrible business!
If the customer is Big and credible and is bullying you by not paying on time:
Factoring without recourse, i.e. palm off the receivable to one of the unsuspecting PSU factors
Case 2:
You are big and you want to fund your vendors:
Vendors would discount your bills and Banks will look to you as a fall back option
Case 3:
You are big and have a hot product and want to fund your channel partners
Channels could borrow from a bank and pay you and if they default, you remain a back stop.
One side of the working capital equation is bloated, one could be creative; if its both then you are in a terrible business!
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