• The loan interest rate for the company may theoretically be below 5%, but usually it is closer to 10%, the cost of factoring starts from 0.05% per day
  • Although both products are used to finance enterprises, they have different assumptions, uses and uses
  • The disadvantage of the loan is low availability for young companies and complicated, often changing conditions during the contract, eg interest rate


Small and medium-sized enterprises account for over 99 percent. all enterprises in Poland. They are responsible for three-quarters of jobs and more than two-thirds of GDP. This data shows how important is the availability of funds for investments in this sector, and the need for external financing is enormous. The reason is first of all payment delays, which companies have to eliminate, as well as the desire to develop and invest, for which capital is needed. The most popular ways to raise funds are – apart from own money – credit and factoring that is becoming increasingly important. Both financing models are very different, especially their time horizon.


Credit – The most Popular, but Difficult to Access and slowly Losing in Importance.


The Monetary Policy Council did not change interest rates at the last meeting. Major changes in this area are not expected by the experts later this year. This argues for keeping the costs of bank loans at an unchanged level, such as a current account loan used to finance working capital or an installment loan.

The disadvantage of the loan is a complicated contract, with a large number of footnotes and asterisks, changing fees, a huge amount of information, not always easily available. Additional fee pricelists are sometimes extended and are still too difficult for customers, including small businesses.

It is also worth noting that getting money in this way is not easy for the SME company. The entrepreneur must meet the difficult requirements of the bank to get a loan. One of them, is practically unattainable for young entities, creditworthiness. Most novice entrepreneurs do not have any collateral and there is no long history at the bank.

The popularity of this form of financing is systematically falling. At present, today’s bank loans are trying twice as many companies than, for example, in 2006, despite the lowest ever interest rate.


Factoring – gaining in importance, more easily available


Factoring is beneficial for companies thinking about short-term financing. If the entrepreneur is waiting for payment for the services rendered or the goods sold, and the recipient expects several months to settle the invoice, then certainly factoring will be worth considering.

– factoring costs are becoming more and more competitive, the total cost can be closed even with 0.05% interest per day, that is, from an invoice to PLN 10,000, it will amount to PLN 50. How much will it cost depends on the moment when the company’s contractor applying for financing settles the payment. Sometimes it is a month, sometimes two, and sometimes a few days – says Bartosz Widomski – Sales Director eFaktor SA

An advantage of factoring is its simplicity. The factor verifies the application and contractors of the factorer, and after a positive opinion, signs the contract and pays the money. In this case, the conditions or the fee for the factor do not change during the contract. The list of possible additional fees is very short. Such a system of evaluation whether an entrepreneur deserves funding and whether his support does not bring risk, apparently suits companies, because more and more uses this form of financing. Currently, it is more than 10% of all, and the increase in the turnover of the factoring industry reaches double-digit rates. In 2017, the factoring industry managed debts of entrepreneurs with a total value of PLN 185 billion. This is an increase of 16.7% compared to 2016.

symulacja podstawowych kosztów kredytu dla małej firmy

12.6% more entities benefited from factoring in the previous year compared to 2016. Factors financed nearly 10 million invoices (data Polish Factors Association – PZF).

– In the case of financing by means of factoring, funds are disbursed, which the entrepreneur has already earned and issued an invoice which is not disputed by the recipient, but he is forced to wait a long time for the transfer. However, these are his already earned money, factoring reduces the waiting time for them, even up to several dozen hours – says Bartosz Widomski from eFaktor.

Instruments for converting receivables into cash are available on the market, but small and medium-sized businesses sometimes fall into a spiral of debt due to a lack of knowledge on how to respond to potential congestion and finance investments. An entrepreneur focused on the essential part of his business does not always have time and energy to analyze funding opportunities. The most important is the proper assessment of the financial instrument in terms of the profitability of the planned investments or the possibility of repayment of installments at a later date.