Self-government’s factoring

Abstract

Local self-governments are reliable business partners. Such belief, confirmed by long-term experience, results in eager collaboration between financial institutions and these entities. Contrary to its name, local self-governments do not constitute the main beneficiaries of the self-government’s factoring. The enterprises which perform investments commissioned by a local commune, district or province are the principal recipients. Such firms may utilise it independently if they have signed contracts with the proper authority and conduct sale with deferred payment, or they may be forced to utilise factoring when they submit their bids in self-government’s tenders within which a refinance guarantee is required. The main aim of the article is to present the mechanism and features of the self-government’s factoring, as well as the benefits which the entities involved enjoy.