postheadericon True Effects Over the Best Factoring Options Now

Factoring is a unique product that helps to solve a lot of financial problems and to significantly advance and strengthen in the market to a potential customer (Supplier). Factoring from Bank is a comprehensive service for your business, which includes:

  • Prompt decision-making on financing without collateral and a basic package of documents
  • Financing under the assignment of the right of a monetary claim
  • Administrative management of accounts receivable
  • Consulting services

Scheme of Factoring

  • Delivery of goods on deferred payment terms
  • Assignment of the right to claim a debt for delivery to the Bank. Submission of original documents to the Bank confirming the origin of the rights of a monetary claim
  • Payment of the initial payment (up to 80% of the claim amount)
  • Payment to the Bank by the Buyer of the delivered goods (works performed, services rendered)
  • Payment of final payment

Advantages of factoring for the Supplier (Client):

  • the possibility of financing working capital without collateral
  • transformation of accounts receivable into “live” money
  • liquidation of cash gaps
  • acceleration of the turnover of funds
  • the possibility of providing Buyers with more favorable terms of payment
  • increasing the number of potential buyers
  • a significant increase in sales volumes
  • improvement of the Buyers’ payment discipline
  • reducing the risks associated with late payment
  • grace period up to 30 days for deferred payment under supply contracts

Advantages of factoring for Buyers:

  • Receipt from the Supplier of goods / works / services with deferred payment (commodity credit)
  • Increase in the volume of purchases without raising additional capital

The Supplier (Customer) must meet the following requirements:

  • Have experience in the market for at least 12 months
  • To carry out regular deliveries of products / performance of works / services on a deferred payment basis
  • Work with regular customers
  • Have a satisfactory financial condition

Products

Open factoring with recourse – The debtor is notified (by giving him a written notice) that the agreement takes part. The factor and the debtor should send payments under the Contract to the Factor account. The factoring invoices are effective there.

Regression – the bank’s right to return the company’s unpaid receivables to the enterprise. In the event of non-payment by the debtor, upon the expiry of the Waiting Period, the Customer undertakes to repay the cash received from the Bank.

Closed factoring with recourse – the Customer is not notified of the signing of the factoring agreement; he continues to make payments to the Client.

At the same time, for the purposes of factoring services, a separate account is opened to the Client, to which payments are made via the Contact. This account is prescribed in the Supply Contract.

Open factoring without recourse – financing under the assignment of the right of a monetary claim with the Factor assuming the risk of the debtor failing to fulfill its obligations under the Contract for payment of monetary claims (provided to customers on special terms).

Comments are closed.