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In this article, Tamás Molnár, head of factoring and structured finance at MBH Bank and president of the Hungarian Factoring Association, discusses how factoring is gaining renewed attention as a flexible financing tool that can help businesses bridge payment cycles, strengthen cash flow and maintain stable operations.
In today’s business environment, companies rarely start with a specific financing product in mind. More often, they are looking for solutions to immediate operational challenges—primarily how to maintain sufficient liquidity while navigating changing market conditions. The structure of financing typically comes later, shaped by what best supports business activity.
This is where factoring is increasingly entering the picture. At its core, it is a simple concept: companies that offer payment terms to their customers are effectively financing those customers through their receivables. In this sense, many businesses operate as a form of bank without necessarily recognizing it. Factoring allows them to transfer this function, converting outstanding invoices into immediate liquidity and freeing up working capital.
Despite this, misconceptions remain widespread. Factoring is often perceived as complex or expensive, even though modern solutions rely on largely automated, electronic processes, and in many cases operate with cost structures comparable to traditional credit products.
Its relevance becomes particularly clear in sectors where timing differences between outgoing and incoming cash flows create constant pressure on operations. The temporary employment sector offers a clear example. Companies in this field are required to pay wages and contributions almost immediately, while their clients typically settle invoices with a delay of 30 to 60 days. This creates a continuous liquidity gap that must be bridged in order to sustain day-to-day operations.
Traditional financing solutions often struggle to address this challenge effectively. These companies typically do not have substantial tangible assets, which limits access to classical credit structures. Their primary asset lies in their receivables—exactly the area that factoring is built on. By turning invoices into immediate cash flow, companies can reduce the time lag between performance and payment, allowing them to operate more smoothly and predictably.
The importance of such solutions becomes even more evident in sectors where operational continuity is critical. In healthcare, for example, financing is not merely a financial issue but a fundamental condition for stable and predictable operation. Service providers face increasing costs, ongoing investment demands and, in many cases, extended payment cycles.
In certain segments, payment terms can stretch to 100–150 days, tying up a significant portion of working capital in receivables for prolonged periods. For companies with limited reserves, this can slow down growth or even restrict their ability to remain competitive in the market.
By enabling the conversion of receivables into immediate liquidity, factoring can help stabilize operations and improve financial predictability. In such contexts, it supports not only business performance but also contributes indirectly to the continuity of essential services.
These developments are also reflected in broader market trends. In recent years, the factoring market has shown significantly stronger growth than traditional lending, highlighting a shift in how companies approach financing.
Rather than viewing it as a substitute for loans, businesses increasingly treat factoring as part of a broader financing structure. The logic differs from traditional lending: instead of focusing primarily on the borrower’s financial performance, factoring builds on the quality and reliability of the receivables portfolio.
This allows for a level of flexibility that is difficult to achieve through conventional financing alone. As companies adapt to a more uncertain environment, access to liquidity is becoming not just a financial consideration, but a strategic one.
This shift is also reflected in how banks are approaching corporate financing more broadly. Rather than offering isolated products, there is an increasing focus on integrated solutions that combine lending, factoring and other financial instruments into a coherent structure tailored to business needs.
At MBH Bank, this approach is also visible in practice. The bank places strong emphasis on building comprehensive financing ecosystems, where companies can access a full range of financial solutions—from traditional lending to factoring and treasury services—within a single, coordinated framework.
This integrated approach is becoming increasingly important as companies move towards more complex financing structures.
In a business environment shaped by uncertainty, such flexibility becomes a key advantage. Factoring, once considered a niche or secondary solution, is increasingly recognized as a practical tool for navigating these challenges. By unlocking the value tied up in receivables, it enables companies to focus on what matters most: running and growing their business, rather than financing their customers.
This article was first published in Economic Review 2026.
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