According to the Banking Council of South Africa, nearly 1,200 businesses made use of debtor financing services in 2003; the total value of invoices financed increased by 63%, to R10.9bn (US$1.69bn). The turnover amount for debtor financing during 2003 is estimated at R50bn (US$7.77bn).
South African business has viewed factoring as an expensive option of last resort. Though factoring is most often associated with companies on the path to liquidation, an emerging alternative is invoice discounting — the company sells its invoices but continues to manage the debtor’s book.
Legal restrictions apply to foreign firms, as factoring is considered part of normal borrowings. Therefore factored sums would be added to total loans when computing maximum allowable borrowing limits.
