Factoring
Factoring is a form of funding which your company needs if you work with payment deferral and try to increase the circulating capital and volumes of sales of goods, works or services. In exchange for cession of rights on monetary claim against the debtors you get from the PJSC «Kreditprombank» the funding in sum up to 95% of amount of supplies, and you do not have to deposit a pledge at that.
Using factoring you can:
- Expand the range of goods at the storehouse, increase volumes of sales, profits and, as a result of it, strengthen market position, improve your business image by effecting timely settlements with your lenders;
- Keep and enlarge client base due to:
- Possibility to work with suppliers under conditions of credit against goods;
- Reduction of expenses on supply (the supplier pays for the factoring services);
- Possibility to increase volumes of purchases without attracting additional capital.
- Improve the payment discipline of debtors due to:
- Everyday control by the bank over the debit indebtedness and timely payment for supplies by the buyers;
- Keeping the history of all settlements against contract entered into with the buyers;
- Informing of buyers on term of payment for the goods or services delivered;
- Provision of various reports on situation with debit indebtedness.
- Cover your trade risks related to the payment deferral (risk of belated payment for supplies by the buyers; risk of variation of currency exchange rate during the period of payment deferral; risk of striking changes in market value of funds).
Scheme of work of factoring with recourse:
- The seller supplies the goods to the buyer;
- The buyer provides the seller with the accounting documents acknowledging the fact of supply of goods (consignment note, bill of lading, etc.);
- The seller provides the bank with the accounting documents (cedes the right on monetary claim to the bank);
- Bank pays the seller the advance in a sum up to 95% of amount in accounting document;
- The buyer pays for the goods to bank’s account;
- The bank transfers the seller a part of sum of the accounting document that remained unpaid less bank commission;
- If the buyer does not pay in due time for the goods delivered, the seller repays the indebtedness against an advance and interest charged on his own account.