Factoring is a complex of banking services, which consists in providing factor financing to the Client under the assignment of the right of monetary claim.
Under the factoring agreement, the Factor transfers the funds to the Client for a fee, and the Client assigns to the Factor its right of monetary claim against a third party (Debtor).
Factoring functions include:
- Financing the supply of goods with deferred payment (depending on the risks inherent in a particular factoring operation, the amount of financing is up to 85% of the amount of delivery).
- Accounts receivable management, which leads to improved customer payment discipline. Accounts receivable management involves:
- control over the timeliness of debt payment;
- providing reports and reminders on debt payment.
- information support of factoring operations, etc.
Advantages of factoring for business:
What is needed to obtain factoring?
You can quickly get an answer about the possibility and conditions of financing:
- Ability to obtain financing without collateral
- Factoring can be provided if there are loans in our or other banks
Factoring accelerates the speed of receivables, which leads to:
- to increase sales, range, and the corresponding expansion of market presence;
- to the growth of operating income in a short period of time, etc.
Factoring work contributes to:
- reducing the risks associated with the performance of Buyers' obligations under supply contracts
- hedging market and currency risks associated with fluctuations in commodity prices and changes in exchange rates
- avoiding liquidity risks.
The need to mobilize funds on a certain date for settlements with the Bank disappears - the debt is repaid at the expense of funds received from buyers of goods.
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