Alternative methods of finance in agrotrade

Tégla Imre

For a number of reasons Hungarian companies are impelled to seek, besides classical banks, other sources of finance allowing enhanced liquidity. In the case agricultural enterprises this need occurs with increased strength, because availability of bank finance for them is scarce due to the special risks characterizing the sector or to a lack of adequate collaterals. The search for alternative sources in our case such as factoring, forfeiting and leasing is even more urgent. Nearly a decade experience with merchant bank financing shows that it is well worth to take up factoring services for domestic deliveries because of the expensive nature of export factoring (domestic factors involves also foreign factors) and forfeiting seems to be a more favorable solution for export deliveries.

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