Factoring operations

What is the factoring?

Factoring is the financial instrument, when the basis for the financing is purchase of the accounts receivable of the client (seller) by the factor (bank). 

The main characteristic of the factoring means providing the opportunity of the deferred payment to the buyer, and the seller receives the payment for the supplied goods/rendered services upon delivery.
Factoring is the complex service. Besides financing, it also includes insurance of the risk of non-payment and the informational-analytical and collection services. 

Factoring scheme: 

1. You provide goods/render service – the Bank repays in advance up to 80% of the services/goods value 
2. The remaining 20% will be repaid upon the maturity, in accordance with the conditions of the contract drawn between the buyer and the seller. 

Factoring users: 

Factoring main users are: 
Entrepreneurs and the wholesale traders, which:

  • Are regularly supplying goods/ services with on differed payment basis 
  • Have non-cash settlement form 
  • Are in lack of floating assets
  • Work at the high competitive market 
  • Try to increase volume of sales 

Advantages: 

For the seller

  • Harsh increase of the sales volume
  • Timely filling of the floating assets; sight receipt of monetary funds upon delivery of goods 
  • Revolving and blank financing 
  • Acceleration of the monetary funds turn over 
  • Improvement of the balance structure 
  • Attraction of the new buyers 
  • Simplified scheme and operability for crediting 

For debtors (buyers)

  • Deferred payment possibility
  • Increase of purchases using convenient modes of payment
  • Effective utilization of floating assets based of deferred payment possibility
  • Reinforcement positions on the market 

Terms and conditions:

Factoring

Commission                       By negotiation, based on the structure and volume
Interest                                 By negotiation, based on the structure and volume