FACTORING

Fast and easy way to your cash.

FACTORING

Fast and easy way to your cash.

WHAT IS

FACTORING?

Factoring is a service by which the factor finances the client based on the purchase of NON-DUE, SHORT-TERM RECEIVABLES, whether they are existing or future. If you need to turn your overdue and undisputed claims quickly and qualitatively into money, we are here for you!

WHO ARE THE

PARTICIPANTS

IN FACTORING?

  • Assignor/Client, seller of goods and services
  • Factoring company
  • Debtor – buyer of goods and services

WHAT ARE THE

ADVANTAGES

OF FACTORING?

  • IMPROVES THE CLIENT’S LIQUIDITY by providing money in the shortest possible time.
  • DOES NOT BURDEN BALANCE SHEETS of clients since factoring jobs are not recorded as a liability.
  • INCREASE THE VOLUME OF SALES, enabling the client to change the credit policy towards debtors and to give longer payment terms compared to the competition.
  • IMPROVES COLLECTION FROM CUSTOMERS, customers are more disciplined in meeting their obligations when receivables are assigned to a factor.
  • CONTRIBUTIONS TO THE COST OPTIMIZATION of the client’s business, since the factor undertakes the performance of all activities related to the administration of claims.

WHICH SERVICES CAN

WE PROVIDE YOU

CLASSIC FAKTORING

The classic factoring service implies that the client assigns its short-term receivables to the factor. With us, you can realize the assignment of claims based on the turnover of goods and services in the form of:

  • DOMESTIC FACTORING between domestic clients and debtors.
  • INTERNATIONAL FACTORING between domestic and non-resident legal entities.

You can realize domestic and international factoring services through:

  • Non-recourse factoring, when the factor assumes the entire risk of collection of receivables. In case of impossibility of collection of receivables, the factor cannot claim the refund of the given advance.
  • Regression factoring implies that the client responds to the factor for the collectability of receivables on the due date of the receivable, that is, the factor does not assume the entire risk of receivable collection. When this type of factoring is contracted, the factor has the right to demand settlement from the debtor, the assignor or from both participants in the transaction at the same time, within the limits of the liability of the debtor and the assignor, if not otherwise agreed. If the factor has recourse against the assignor, the factor is obliged to return the claim to the assignor.

What does the factoring business look like on an example?

THE CLIENT DELIVERS THE GOODS/PERFORMS THE SERVICE TO THE CUSTOMER

for which he issues an invoice on deferred payment. The payment term cannot be longer than 90 days.

CLIENT SUBMITS INQUIRY FOR FACTORING

of overdue receivables

THE FACTOR SUBMITS AN OFFER FOR FACTORING.

THE CLIENT ACCEPTS/REJECTS FACTORING

IF THE OFFER IS ACCEPTED, THE FACTOR PREPARES THE CONTRACT DOCUMENTATION

THE CLIENT SIGNS THE DOCUMENTATION AND INFORMS THE BUYER ABOUT THE CHANGE OF THE CREDITOR

THE FACTOR PAYS THE ADVANCE TO THE CLIENT

THE FACTOR IS AWAITING THE COLLECTION OF THE CLAIMS FROM THE BUYER

THE FACTOR COLLECTS THE RECEIVABLE FROM THE BUYER.

On the day of collection, the factor deducts the amount of the advance payment and financing costs from the collection amount and pays the difference to the client.

FUTURE

CLAIMS

If the information about who will be the Receivables Debtor is known in advance, future receivables for the sale of goods and services can also be the subject of factoring. The factoring contract, the subject of which is a future claim, determines the minimum amount and the date by which the claim should arise. The claim arises now when the assignor of the claim has drawn up an invoice for the goods and services it sells to the Debtor under the contract.

An example of factoring future receivables

THE CLIENT CONCLUDES A COOPERATION AGREEMENT WITH THE BUYER

The cooperation agreement specifies the basic terms of cooperation: the subject of cooperation, the amount of receivables that will arise, the dynamics of delivery and payment.

CLIENT SUBMITS INQUIRY FOR FACTORING

future claims

THE FACTOR SUBMITS AN OFFER FOR FACTORING.

THE CLIENT ACCEPTS/REJECTS FACTORING

IF THE OFFER IS ACCEPTED, THE FACTOR PREPARES THE CONTRACT DOCUMENTATION

THE CLIENT SIGNS THE DOCUMENTATION AND INFORMS THE BUYER ABOUT THE CHANGE OF THE CREDITOR

THE FACTOR PAYS THE ADVANCE TO THE CLIENT

based on future claims.

FACTOR AWAITS DELIVERY AND INVOICING CLAIMS

THE CLIENT ISSUES INVOICES AND ASSIGNS THEM TO THE FACTOR

THE FACTOR PREPARES THE CONTRACT DOCUMENTATION

THE CLIENT SIGNS THE DOCUMENTATION AND INFORMS THE BUYER ABOUT THE CHANGE OF THE CREDITOR

INSTEAD OF PAYING AN ADVANCE, THE FACTOR INTERNALLY POSTS THE ADVANCE TO THE AGREEMENT ON FUTURE RECEIVABLES.

THE FACTOR IS AWAITING THE COLLECTION OF THE CLAIMS FROM THE BUYER

THE FACTOR COLLECTS THE RECEIVABLE FROM THE BUYER.

On the day of collection of receivables, the factor deducts the amount of the advance payment and financing costs from the collection amount and pays the difference to the client.

REVERSE

FACTORING

Reverse factoring is a variation of classic factoring, which is contracted between the factor and the debtor from the contract for the sale of goods or the provision of services in the country and abroad, based on which the factor assumes his obligation TOWARDS CREDITORS, and has the right to collect from the debtor within the period defined by the contract on the sale of goods or provision of services. Unlike classic factoring, in this transaction the debtor is obliged to secure the consent of the creditor.

An example of reverse factoring

THE CLIENT DELIVERS THE GOODS/PERFORMS THE SERVICE TO THE CUSTOMER

and issues invoices to the customer.

CLIENT SUBMITS INQUIRY FOR FACTORING

of overdue receivables

THE FACTOR SUBMITS AN OFFER FOR FACTORING.

THE CLIENT ACCEPTS/REJECTS FACTORING

IF THE OFFER IS ACCEPTED, THE FACTOR PREPARES THE CONTRACT DOCUMENTATION

THE BUYER SIGNS THE DOCUMENTATION AND INFORMS THE CREDITOR

THE FACTOR PAYS THE BUYER

THE FACTOR IS AWAITING COLLECTION FROM THE BUYER

THE FACTOR IS CHARGED BY THE BUYER

On the day of collection of receivables, the factor deducts the amount of the advance payment and financing costs from the collection amount and pays the difference to the client.

COSTS OF

FACTORING TRANSACTION

Based on the concluded factoring contract, the factor pays the client an advance of 60-95% of the receivable amount and calculates the following costs:

  • FIXED COST – commission for the processing of the factoring transaction, calculated once as a % of 0.2-3% on the amount of the advance payment
  • VARIABLE COST – interest, calculated monthly on the amount of the unpaid claim in % of 0.2-3% on the amount of the unpaid claim.

For more questions or to apply for factoring,  please contact us.

WHAT FACTORS AFFECT

FINANCING COST?

Unlike other factoring companies, we do not have a predetermined price list for our services. We foster a PERSONAL APPROACH TO THE CLIENT and we make the financing decision based on experience and financial assessment regarding PLACEMENT RISK ASSESSMENT. The factors that determine the price of the service are:

  • Assessment of the debtor’s creditworthiness,
  • Assessment of the client’s creditworthiness in the case of recourse factoring,
  • Assessments of the quality of collateral,
  • Assessments of the riskiness of the sector from which the debtor/client come,
  • Forced payment indicator,
  • Indicator of correction of the value of client receivables,
  • Indicators of problematic placements,
  • Experience assessments of our team in cooperation with the sector from which the debtor/client comes.