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2 min readBy Sega Diarrah

Factoring: accelerating cash flow without traditional debt

Factoring turns trade receivables into cash within 48 hours — no extra debt on the balance sheet, no bank credit lines tied up.

Why factoring is a step-change for SMBs

Factoring turns a trade receivable — typically a 30, 60 or 90-day invoice — into immediate cash. Unlike a bank overdraft or a term loan, factoring does not increase your leverage: technically, you sell the receivable, you don't borrow against it.

For a French or African SMB, the impact shows on three KPIs:

  • DSO (Days Sales Outstanding) drops 5- to 10-fold on factored invoices
  • Working capital requirement shrinks — less reliance on equity or overdraft
  • Investment capacity unlocked immediately

What Tauraco does differently

Three things:

  1. A marketplace, not a single factor. Your invoices are placed in front of qualified investors through a reverse-auction mechanism — the rate drops as bids come in. No fixed pricing imposed by your incumbent bank.
  2. Decision in under an hour. OCR extracts the fields, AI scoring grades the invoice A through E, an analyst validates. You get a firm rate before noon.
  3. No long-term lock-in. You factor only the invoices you want, when you want. No volume floor, no rigid framework agreement.

Who it's for

The Tauraco factoring marketplace targets SMBs and mid-caps that:

  • have solid blue-chip B2B customers (public sector, distribution, large industry)
  • face payment terms longer than 45 days
  • want to avoid equity dilution
  • look for an alternative to legacy factors (banks, specialised firms) often rigid on pricing and geographic coverage

How much does it cost?

A single fee expressed in bps (1 bp = 0.01 %), shown before acceptance. For an A-grade 60-day invoice: 80 to 150 bps. For a C-grade 90-day invoice: 250 to 400 bps. No hidden fees — no setup charge, no subscription.

In Islamic pricing mode (Murabaha), the mechanism is commission-only with zero interest — Sharia-compliant and available on request.

Tauraco use cases

A Senegalese construction SMB finances three public contracts at once without touching bank lines. A Lyon-based manufacturer smooths cash flow across a long cycle by factoring only its blue-chip invoices. An Ivorian exporter converts EUR 90-day receivables into immediate XOF cash.

Going deeper