Back Receivables Finance (Factoring)

What is factoring?
Factoring is a financial instrument based on purchase of customer’s (the seller) accounts receivable by the factor (the Bank).
The main feature of factoring is immediate receipt of sales revenue from goods/services supplied by the seller while the buyer enjoys the benefits of deferred payment .

Factoring is a comprehensive service package. Besides financing, it ensures against the risk of payment default, provides analytical and collection services.

Factoring  summary:

  1. You supply goods/services and theBank pays you80% of cost of goods/services supplied;
  2. Remaining 20% are paid upon contract maturity as agreed between seller and buyer.

Factoring users:
Factoring is mainly targeted byproducers and wholesale traders that:

  • Supply goods/services under deferred payment terms on a regular basis.
  • Apply non-cash settlement method
  • Have shortage in working capital
  • Operate in highly competitive markets
  • Aim on increase in sales volume

Advantages:

For creditors (sellers)

  • Sharp increase in sales volume
  • Higher working capital turnover;receipt of sales revenues immediately upon delivery
  • Collateral-free, revolving financing facility
  • Accelerated cash turnover
  • Improved balance structure
  • Attracting new buyers
  • Simple and efficient financing framework

For debtors (buyers)

  • Room for deferred payment
  • Increase in purchase volume thanks to to convenient payment means
  • Efficient utilisation of working capital thanks to deferred payment on goods/services purchased
  • Improved market position
Fee

Negotiable upon transaction volume and structure

Commission interest rate

Negotiable upon transaction volume and structure

 

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