What is commercial development
Mercantile development, also known as factoring, is a financial operation in which a company assigns its credit rights to a financial institution, called a fomento mercantil, in exchange for immediate financial resources. This practice is common among companies that need quick working capital and don't want to resort to traditional bank loans.
How commercial development works
In commercial development, the company sells its credit rights, such as trade notes and post-dated checks, to the factoring institution. In return, it receives a financial advance, which can be up to 90% of the total value of the invoices. The factoring company is responsible for collecting the amounts from the debtors and passing the remainder on to the assigning company, netting a service fee.
Advantages of commercial development
Commercial development offers several advantages for companies, such as obtaining financial resources quickly and easily, without the need for real guarantees. In addition, the lending company can better manage its cash flow, reducing defaults and financial risks.
Disadvantages of commercial development
Despite the advantages, commercial development also has some disadvantages, such as the higher cost compared to other forms of financing, due to the service fees charged by the factoring company. In addition, the assigning company may lose some of its autonomy in the management of receivables, since the factoring institution becomes responsible for collection.
Types of commercial development
There are different types of commercial factoring, such as conventional factoring, international factoring and export factoring. Each type meets the specific needs of companies, such as carrying out operations abroad or financing sales to foreign markets.
Regulation of commercial development
In Brazil, commercial development is regulated by Law No. 9,249/1995, which establishes the rules and limits for the practice of factoring in the country. The legislation defines the obligations of factoring companies and assignors, guaranteeing security and transparency in operations.
Conclusion
Commercial development is an interesting alternative for companies looking for fast working capital without bureaucracy. With proper analysis and planning, this type of financing can contribute to business growth and sustainability.