What is a factoring agreement. What is factoring in simple terms

There are many definitions of factoring. The simplest, legislatively enshrined in the Civil Code of the Russian Federation, is "financing against the assignment of a monetary claim."

On this moment The factoring market in Russia is growing, more and more factoring companies are appearing, many banks are opening factoring branches and starting to provide factoring services, but the situation is complicated by the fact that the Civil Code of the Russian Federation still does not have a clear legislative regulation of factoring operations.

Nevertheless, at the end of 2012, the factoring turnover in Russia amounted to 1.4 trillion rubles.
Let's try to understand the concept of financial factoring in more detail and evaluate its benefits using specific examples.

2. Types of factoring

Until now, there is such a definition in open sources as "factoring of accounts receivable", because initially there was only one type of factoring - factoring with the right of recourse. However, adjusting to market requirements, factoring has received more and more varieties, and now many factoring companies can offer their customers a whole line of products.

Let's consider them in more detail.

1) Factoring with regression. it classic scheme factoring used in the sale of goods with deferred payment. The factor buys, as a rule, 90% of the receivables of the Client Company, however, after the expiration of the grace period, the right of recourse comes, i.e. The Factor has the right to request the previously issued financing from the Client Company. This is one of the most common factoring services. It is convenient for the factor because it does not bear any risks, and for the Client Company - because it receives financing immediately after the shipment of the goods, while avoiding cash shortages;
2) Factoring without recourse. This kind factoring in 2012 developed the most actively. This type of factoring is also relevant for companies working with deferred payment. Basically, it is the purchase of receivables. The client company can ship products on deferred payment terms, while receiving financing from the Factor immediately after the shipment of the goods and in full, eliminating the risk of non-payment and the occurrence of cash gaps. It should be noted that this is the most expensive type of factoring for the Client Company, because The factor carries quite serious markets. Not all factoring companies offer factoring in their product line without recourse, and if they do, they impose serious restrictions on industries, turnover of the company, time of existence on the market, and also conduct a serious check of both the Client Company itself and its debtors;
3) Guarantee for Buyers. This type of factoring is similar to credit risk insurance. The factor issues a surety to the Client Company in case of non-payment of any of the debtors. At the same time, financing is paid only in the event of overdue receivables. For the Client Company, this is convenient because it is possible to minimize the risks of non-payment even when working with new clients, for example, using this product, open offices and work with clients from other regions. For Factor, this service is good in that it has a high added value, and at the same time, cases when you really have to pay financing are extremely rare;
4) Procurement Financing, Procurement or Reverse Factoring (all definitions are absolutely equivalent).
In this type of factoring, the client of the Factor is not the company that produces or sells goods, but its debtor. This scheme is often used if the distribution company refuses to work on a deferred payment basis, and its debtors do not have enough free funds to purchase goods from the required volume... It works in the following way: The distributor company ships the goods to the Debtor, while the financing of this purchase is made by the Factor, and the debtor company receives the necessary payment deferral, during which it can sell the goods to its customers, and only after that settle with the Factor;
5) International factoring. It can be imported and exported. It is also divided into recourse and non-recourse factoring. At the same time, factoring schemes with recourse and without recourse are implemented similarly to internal factoring, the only difference is that there are already 2 factors involved in the transaction, and the transaction itself is no longer in rubles, but in any foreign currency. In order to participate in international factoring operations, Factor must be a member of the international factoring associations FCA and IFG. Accordingly, not all Russian Factors can provide such a service;
6) Open or closed factoring. This concept can be applied to any of the above types of factoring (except international). In case of open factoring, the debtor signs a special agreement on factoring work with the Client Company of the Factor and pays the financing to the settlement account of the Factor. With closed factoring, the debtor may not be aware of the existence of a factoring service agreement.
These are the main types of factoring implemented in Russia. Some factoring companies are trying to develop local products. However, they are so rare that it makes no sense to pay special attention to them.

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3. Example of factoring

Let's consider the work of factoring with a specific example.
Suppose company A. is engaged in the production building materials... The market is highly competitive, which means that deferred payment will be an obvious competitive advantage.

In addition, company A. wants to sell its goods through federal building hypermarket chains, which, in principle, work exclusively on deferred payment. However, the granting of a deferral entails cash shortfalls and company A. simply does not have enough working capital.

This is where factoring comes in to help company A. Moreover, the tasks of company A. can be solved by classical factoring with regression.

Company A. enters into a factoring service agreement with the factoring company F. with 100% financing and a 60-day deferred payment.
Company A. sells its goods with this delay, while receiving 100% financing from the Factor immediately after the shipment of the goods, and settles with the Factor when the debtors pay.

4. Factoring and forfaiting

Considering that the topic of factoring still causes some difficulties (sometimes the concepts of factoring and leasing or even lending are confused), let us compare it with such a financial product as forfeiting.

Both financial instruments are applicable only for the international transactions market. Both factoring and forfeiting arise when working with deferred payment.
The essence of forfeiting is that the Company, which works with its debtors on a deferred payment basis, may demand from them a bill of exchange or IOU... At the same time, a bill of exchange is a certain guarantee of payment from the debtors' side.

As a rule, forfaiting is applied when the payment is deferred for up to 10 years, while the maximum deferral for factoring is 180 days.
The amounts of forfeiting transactions are much higher than those for factoring, so a third party guarantee is required.

Another difference is that the Factor can exercise the right of recourse (when using a recourse factoring product), and the forfaiter takes all the risks of non-payment on himself in any case.

One way or another, both schemes take place, depending on the needs of the company.

The advantages of factoring over other financial instruments can be only if it fully meets the tasks facing the company. The most important advantage over such services as, for example, credit, insurance or leasing is that factoring is not just financing a company, it is a whole range of services for managing accounts receivable (the work of collectors, underwriters and loan officers).

Do you know how to achieve success in business thanks to the experience of successful entrepreneurs?

5. Leaders of the factoring market and trends in the development of factoring in Russia

The leaders of the factoring market in Russia are:

VTB factoring - 24% of the market;
Promsvyazbank - 18% of the market;
Alfa Bank - 11% of the market;
Bank Petrocommerce - 8% of the market;
National Factoring Company - 5% of the market.

These factors provide almost all product line factoring, have a large staff of specialists and a significant client portfolio. At the same time, there are many small companies on the market that define themselves as factoring, but in fact issue ordinary loans. Perhaps the existence of such companies makes the concept of factoring and factoring bank in Russia rather vague.

In 2012, the factoring market grew by 63%. In 2013, experts predict an increase in the volume of factoring services by another 40-50%, but the growth rate will slow down somewhat. At the same time, the pace of the market will largely be determined by the actions of newcomer companies. Already, competition among banks providing factoring services and factoring companies is estimated at 3.9 points on a five-point scale, and by 2013 this figure will increase even more.

Despite the fact that at the end of the 1st quarter of 2013 there is some stagnation in the market, it is expected that by the end of 2013 the volume of factoring operations will reach 2 trillion rubles.

Nevertheless, the factoring market as a whole in Russia is still being formed, its potential is very high.

VIDEO ON THE TOPIC: “What is factoring”?

Hello! Today we'll talk about what factoring is. Suppliers of goods (and sometimes services) are often faced with a choice - to work on a prepaid basis or to provide a deferred payment? In the first situation, you can lose some of the clients, in the second case - funds to finance current activities. Save the golden mean factoring will help. We will talk about him in this article!

Factoring concept

What is factoring?

Factoring- this is financing against the assignment of a monetary claim.

In simple words, factoring can be explained as a form of commodity credit when the rights to the debtor's debt are transferred to a third party (in this case, a factor). Thus, the supplier of goods or services receives payment from the factor faster than specified in the supply contract with the buyer.

The term came to us from of English language, where factoring in this situation is translated as "mediation".
Both a specialized factoring company and a factoring department of a bank (which is most common in Russia) can act as a factor.

The essence of factoring is reflected in its functions:

Supplier financing, urgent increase of its working capital;
Management function, in other words - debt collection;
Also, if necessary, insurance against the risks of non-payment.

Download Factoring Agreement for the Purposes of Ensuring the Performance of Obligations
Download Factoring Agreement for Financing Existing Claim
Download Factoring Agreement for Future Claim Financing

Factoring scheme

Factoring always involves three parties:

Factor (factoring company or bank department);
Supplier of goods (client, creditor);
Buyer (debtor);

The most common factoring scheme can be outlined in several steps:

The supplier ships the goods, having agreed with the buyer on a deferred payment (from a week to four months);
The supplier enters into an agreement with the factoring company, sends it the invoices;
The factor finances the invoices provided, the supplier receives his payment. Usually the factor immediately pays about 90% of the total cost, the remaining 10% is paid after the buyer receives and inspects the goods. Of course, the factoring company takes a commission specified in the agreement for the services;
The buyer pays for the goods to the factor.

Factoring stages

Preliminary work ... Before the conclusion of the contract, an assessment and analysis of a potential client, his financial capabilities, is carried out. The supplier must provide information about the buyers, about the terms of delivery, payment and necessarily about cases of violation of the contract, if any in the past;
Documenting... Be sure to prescribe in the contract for the provision of factoring services:

Subject of the contract;
The rights and obligations of the participants;
Financing procedure;
Lending limit;
The procedure and conditions for transferring the rights to the debt to the factor;
Factor service price, calculation procedure;
If necessary, insurance against breach of obligations by the debtor;
The term of the agreement, as well as other conditions.

Factoring transaction control:

Do all participants fulfill their obligations (in case of violations, a claim is formed);
Whether the assets involved meet the documented requirements of the factoring company;
Whether the customer (vendor) or customer (customer) rating should be changed.

When factoring is needed

The need for factoring is closely related to the growth of world trade, when long periods of time after shipment of goods and before payment began to appear more and more often.

The need for factoring may arise in force majeure situations.

The main cases when entrepreneurs resort to it can be outlined as follows:

If you urgently need to increase working capital, and through factoring it turns out to be cheaper than through a short-term loan. More often this reason is relevant for small businesses, for which there are very few affordable and profitable loans in modern Russia;
When, in order to attract a buyer, it is necessary to provide him with convenient payment terms;
To work with new buyers who are unstable in payment;
When delivering from small enterprises to giant corporations, since the latter often work according to inflexible schemes with unchanged payment terms.

Factoring services are not provided:

Companies with big amount buyers with current debts;
Manufacturers of specialized goods;
Firms that do not issue invoices immediately, but after certain work has been completed;
Companies working with subcontractors;
After Sales Suppliers.

Also, it should be noted that factoring is not possible in relation to:

Settlements between branches of the enterprise;
Debt obligations of individuals;
Budgetary organizations.

Factoring or credit

Factoring	Credit
Short terms, from several days to a year (no more)	Only long-term possible
No collateral	Usually issued on bail
The amount depends on the sales volume of the supplier	The loan amount is determined in advance
Finances the current activities of the company	More often issued for business expansion and other changes
The commission is deducted from the amount. There is a scheme when the amount of debt is paid in installments (for example, part - before settling with the debtor, part - after)	The full amount is issued immediately
Less paperwork (contract, invoice, invoice), the contract can be indefinite, having concluded it once, the client will receive financing after the presentation of invoices and invoices	A large package of documents is required, repayment of one loan does not guarantee the receipt of the next one. For each loan - a new agreement
The debt is repaid by a third party	The debt is paid by the same person who took the loan

Types of factoring

There are several classifications of factoring. The main ones are:

By informing:

open (the buyer knows about the contract between the supplier and the factor, he pays to the latter);
closed (the buyer is not aware of the presence of a factoring company in the transaction, he pays for the goods to the supplier, and the latter is already calculated with the factor).

By distribution of risks:

recourse factoring (less common, implies that the factor returns unpaid invoices to the supplier and requires the return of the loan if the debtor has violated the contract);
no recourse (the factoring company assumes all risks and covers everything, even the client's legal costs caused by debt collection).

At the moment the debt arises:

real (factoring agreement is concluded after the onset of debt obligations);
consensual (the debt is assigned in advance).

By residency of participants:

internal (all participants are in the same country);
external (aka international factoring).

By the number of factors:

direct (one factor is involved in the transaction);
mutual (two factors).

By the range of services provided:

wide (conventional) - in addition to financing and collection of debt, the factoring company provides accounting, insurance and other customer services;
narrow (limited) - the list of services is limited by basic functions.

By type of document flow:

electronic (EDI factoring) - using electronic document management;
traditional.

The advantages and disadvantages of factoring

Factoring benefits:

No deposit required;
Soft requirements for the supplier's solvency;
Acceleration and guarantee of uninterrupted cash flow. The intended use of funds occurs in full (when using loans on the account, the company must always have a constant balance);
The factoring company, in fact, organizes the collection of the client's debt;
The conclusion of a factoring agreement can be regarded as insurance against non-payment or insurance of currency risks in international transactions;
Savings on, which is paid from the moment the goods are shipped. Without factoring, a situation is possible when tax liabilities for the goods occur before the supplier receives funds from the buyer;
Funding through factoring is not considered a loan, and therefore does not affect the company's balance sheet;
Attracting buyers with a flexible schedule of payment for goods or services.

Disadvantages of factoring versus lending:

High cost - factoring commission in Russia can be up to 10% of the buyer's debt or up to 30% per annum;
With a fast and streamlined pace of payments, factoring is meaningless;
It is necessary to provide detailed information about the buyers;
In practice, factoring is currently only applicable to deliveries paid for by bank transfer.

How to choose a factoring company

When choosing a company that provides financing under a factoring scheme, you should consider:

What tasks do you need factoring services for? In the event that you need a factor for long-term work with problem supplies, do not skimp on a large and proven factor with a wide range of services. For one-off situations, more modest options are suitable;
Always check reviews. In the age of the Internet, this will not be difficult. Select objective assessments of past clients and, on their basis, choose the factor that suits you;
Compare the cost of services. What commission does the factor take for its services? Is there a commission for late payment by the buyer?
The ability to use the Internet to exchange documents and electronic signature significantly speed up the process.

TOP-10 banks providing factoring

There are many banks that provide factoring services. Here are just the main ones:

Sberbank
Alfa Bank
VTB 24
Gazprombank
Credit Europe Bank
SME Bank
Bank National Factoring Company (NFC)
Bank "Revival"
Promsvyazbank
OTP Bank

Which bank to choose is up to you! If you have experience with any bank, then we are waiting for your feedback in the comments!

What is factoring? What is its advantage? What types of factoring are there and how to choose the right factoring company for a beginner?

Good day! Eduard Stembolsky with you. For over ten years I have worked as a financier in various domestic companies. Today we will talk about factoring.

My professional profile is accounts receivable optimization. Factoring very often allowed me to avoid cash gaps and normalize cash flow enterprises.

So, if you want your money not to "settle" with counterparties at the most inopportune moment, read on.

1. What is factoring - a complete overview of the concept for beginners

In a narrow sense, factoring is a special format of trade lending. More broadly, the concept of factoring is as follows:

Factoring- this is an unsecured provision of cash (working) funds to the supplier in response to the assignment of a monetary claim to the buyer (arising at the time of shipment of goods or provision of services).

The factoring company (factor) becomes the new owner of the rights to demand payment. An important point- the factor receives "accounts receivable" for which no violations of the terms of payment were recorded. Otherwise, it would be a collector. And this is a fundamentally different direction of activity!

A broader interpretation of the concept of factoring also includes processes for assessing and insuring the risks of non-payment, which depend on how reliable the buying company is.

The history of factoring

The history of factoring dates back to antiquity. This, in particular, is evidenced by the origin of the term from Latin facio, literally translated as "the one who does."

The main reason for the formation of the need for factoring is the development of world trade, which assumed a significant time interval between the shipment of products and payment.

Factoring developed in Russia at the beginning of the 2000s. Domestic banks are the main factoring companies. Russian factoring turnover currently does not exceed 0.5% of GDP (in Western economies this figure ranges from 2% to 20%).

2. Why factoring is needed and what are its main advantages

So, above we figured out what this is "factoring". If we define factoring in simple words, then it will sound like this:

Factoring- This is the receipt of money by the supplier from the factor in a time that is shorter than that provided by the contract for the supply of goods.

Most often, the factor pays about 90% of the cost of the goods at once. The rest of the amount is received after the buyer confirms receipt of the product and the absence of any claims or makes payment.

It goes without saying that the conditions of factoring imply payment for the services of the factor (in the form of some commission).

The need for such a scheme may arise in the event of force majeure. Very often, it is cheaper to quickly build up working capital using various schemes factoring than resorting to short-term loans. And in domestic practice, the access of small businesses to borrowed funds is significantly hampered.

But can factoring initially be included in the financial plans of an enterprise? The answer is yes. Many companies are forced to resort to factoring, working in a “buyer's market”.

Deferred payment acts as a competitive advantage, and an increase in the turnover of working capital is achieved through factoring.

In domestic practice, factoring is often encountered when registering the supply of goods and services from small firms to giant corporations.

Large legal entities often show inflexibility in contractual work and are ready to cooperate only using a kind of "template" agreement for the supply.

It is almost impossible to achieve a change in the terms of payment, this is opposed by the bureaucracy of giant corporations, which does not want to allow a precedent for a change in established practice.

Important!

A common problem in such a case is the occurrence of tax liabilities before the receipt of proceeds, since the sale is recognized upon the shipment of the goods.

Factoring has several other advantages:

unlike a loan, it does not require the use of collateral;
the factoring company actually collects the client's debt;
a factoring agreement is, in a sense, an insurance against the risk of non-payment.

The main advantages and disadvantages of factoring are presented in the table below. The analysis is based on a comparison with a bank loan.

3. The main types of factoring and their features

There are many types of factoring depending on the needs of the clients.

The main types of factoring are as follows:

open and closed;
with regression and without regression;
domestic and international.

Below, I will tell you about each in more detail.

From the point of view of informing the participants in a factoring transaction about its conclusion, there are open and closed (confidential) factoring.

In the first case the buyer receives information that the supplier has entered into an agreement with the factoring company. In this case, the invoice is drawn up accordingly (a note is made about the need to transfer funds in favor of the factor).

In the second, means that the payer is not notified that a factoring agreement has been concluded. The debtor transfers the funds to the supplier, who, in turn, pays them to the factor.

From the standpoint of risk distribution, factoring can be with regression and factoring no recourse .

Regression factoring , i.e. recourse means that if the debtor violates the terms of the contract, the factor can return the unpaid invoices to the supplier and demand the return of the loan. V real conditions given condition very rarely provided for in contracts.

Non-recourse factoring stipulates that the factor not only assumes the risks of non-payment, but also undertakes to cover all the costs of its client associated with debt collection (including litigation).

From the point of view of residence, the participants in the factoring transaction are distinguished internal factoring and external (international) .

With internal factoring both the supplier, the buyer, and the factor are registered in the same country.

With international factoring participants in the transaction - residents different countries... External factoring is characterized by long-term contracts that imply the transfer to a factor of all receivables from a buyer or all buyers who are residents of a particular country.

4. How factoring works - 3 stages of factoring

From the perspective of the supplier, the factoring transaction is quite simple. Given the low risks, one of the basic criteria is the prices for the services of the factoring company. However, we will consider some of the nuances below. The stages of factoring look different from the point of view of a factoring company.

Factoring stages and scheme:

Stage 1. Assessment of a potential client

At this stage, the work of a potential client is analyzed. The greatest attention is paid to the financial condition of its debtors. This is due to the fact that the main risk factor is the failure of the buyer to fulfill his obligations.

In the course of this work, information is requested from the supplier:

about counterparties;
on the terms of supplies and payments;
on the facts of violations of contractual obligations.

The security service of the factor should check the accuracy of the data received. The credit rating of the buyers is also considered. Whenever possible, information about the timeliness of repayment of loans received from banks is investigated.

The terms of the supply agreement are reviewed for compliance with the terms of other similar agreements entered into on the market. If there are significant deviations, their reasons are analyzed (this helps to minimize the likelihood of abuse).

Also, the factoring company must assess the likelihood of complaints (claims), investigate such cases and understand their reasons.

Stage 2. Registration of a factoring transaction

The conclusion of the contract is carried out after the factor decides to service all or some of the client's receivables.

The contract must necessarily reflect:

conditions and procedure for financing,
mechanism for the transfer of rights to receivables,
the cost of services and the procedure for settlements.

At the same time, the factor may decide to insure the risk of failure by the buyer to fulfill his obligations.

Stage 3. Control of the factoring agreement

This is a very important part of a factoring company.

We are constantly working in a number of areas:

Analysis of the fulfillment by the parties to the transaction of their obligations and the formation of claims in case of violation.
Asset Compliance Monitoring involved in the implementation of the factoring agreement, the requirements of the factor reflected in the agreement.
Periodic reassessment as the client itself and its debtors. This is especially true for those enterprises that belong to problem sectors of national economies.

5. How to choose the right factoring company - 5 tips from an expert

Below I will tell you how to choose the right factoring company that can be trusted to handle your receivables.

5 golden tips for newbies:

Decide what you need factoring services for. If the main task is to solve a problem with a specific counterparty, then a fairly narrow list of services will suit you. Otherwise, look for the factor that will agree to service all your receivables and work with non-standard deliveries. It is possible that it will cost a little more, but you are guaranteed not to be left without working capital.
Don't get hung up on banks, especially if your turnover is low. Unfortunately, domestic bankers can provide services to large and small clients of different quality... Realizing that you cannot earn much on your turnover, they will take too long to consider the documents you provide. In this sense, small factoring companies can work much more efficiently.
Do not be lazy to collect reviews about the company on the world wide web. But don't panic when you run into negative impressions from any one customer. Human psychology is designed in such a way that, being dissatisfied with the service, he receives a much more powerful motivation to “inherit on the Internet”.
Estimate the cost of services. The two main questions in this case are factor commission size and existence or absence of a commission for late payment by the buyer.
Take an interest in the possibility of using electronic document management and electronic signature. In practice, this can speed up the receipt of money by several days.

6. Conclusion

So, in this article we got acquainted with such a tool as factoring, figured out how to use it to improve the working capital management process and formulated provisions that will help you choose a factoring company for cooperation.

What does the word "factoring" mean? Factoring is the assignment of debt to a third party, carried out in order to normalize financial relations and eliminate delays in payment for goods, work, services or rights. Successful business conduct and development is impossible without additional funding. Factoring provides financial support for the current business and provides an opportunity to receive funds before the buyer pays for the delivery. Thanks to this service, the company returns funds to circulation faster, while reducing the percentage of production risks.

Factoring can be called a chain of services required to assign or transfer a receivable, that is, the debt of one firm to another. In simple terms, a factoring company (in particular a bank) pays the client for his goods or services instead of the buyer (75-90% of the cost), buys out short-term receivables and discounted payment documents. In this case, the intermediary (factor) receives a commission from the debtor's debt.

Factoring is a specific type of lending for goods or services. Convenience for the seller lies in the fact that without his participation, the intermediary collects the debt from the buyer. If the firm sells goods in installments, there is no need to wait until the end time. Thus, a businessman or a supplier of goods receives real money that allows him to develop and function.

Factoring parties:

The customer is the supplier of the product (the lender).
Buyer (debtor).
An intermediary (bank) providing real money to the seller.

Benefits of factoring

Factoring benefits all parties. Sellers can receive money before the sale of goods or services, and the intermediary has income in the form of a share of the buyer's debt. Thus, the factoring company reduces the risks of all parties to the relationship.

The advantage of factoring is the ability to collect debts, which allows you to finance working capital. The factoring company bears risks if it is the insurer of the transaction. The combination of these functions of the factor allows small and medium-sized businesses to act and develop. This is especially beneficial when small companies cannot get a loan from a bank.

The well-established communication scheme of the three parties ensures a smooth trade process and contributes to the development of the economy and the market. The supplier receives money quickly, and no collateral or guarantor is provided, as in lending. The buyer receives the goods, selling them without delay. The factoring company has a commission on the transaction. The convenience of such a transaction lies in its mobility and simplicity, and the benefits are obvious due to flexible terms and low interest rates.

Types of factoring:

The classic type of factoring with regression. If the goods are sold with a delay, then the factoring company buys out about 90% of the debt. After the expiration of the term, the intermediary has the right to demand from the seller the funds issued before. In the event of recourse, the factoring company practically does not risk. This is the best type of relationship with regular customers.
Non-recourse factoring means that the intermediary company independently demands money from the buyer, provided that the invoices are not paid on time. The current type of factoring when interacting with new customers.
Internal factoring includes participants residing in the same country.
The international type of factoring relations implies the participation of parties from different countries. International actors take part in the transaction, namely the factor from the supplier and from the buyer.
Open factoring. The buyer and the debtor are notified of the direction of the payment to the factoring company, which is noted on the invoice.
Closed factoring implies the secrecy of the transaction. The lender is not informed about the participation of the intermediary company in the transaction.
Reverse factoring implies the possibility for the creditor to defer payments on debts or for the products received.

The factoring company is obliged to finance, maintain accounting, present monetary claims for payment and protect against insolvency of debtors. A factoring company can be a commercial organization or a bank. Nevsky Bank provides services

Domestic business still knows too little "about factoring". In Western advanced economies, this scheme has long become the standard approach to doing business. Simplicity, transparency and loyalty to the client allow the participants of factoring schemes to reach a completely new level customer service.

The essence of the operation is that the money for the goods purchased by the client is certain conditions paid by the factoring company. As a result, a person who has visited the store gets the opportunity to buy the thing of interest to him, even having a small part of the funds from the total cost of the goods.

Factoring plus financing. In this case, the supplier of the goods agrees to the assignment to the factor (the company that redeems the buyer's debt of the goods) of the right to receive payment from the buyer. In most cases, the amount received from the factor is 80 to 90% of the cost of goods sold.
Factoring minus financing... This scheme involves the collection of the customer's accounts receivable by an intermediary firm.
Factoring open type - in this situation, the debtor is notified of the participation in the settlements of the company providing factoring services.

In turn, confidential factoring does not at all imply notifying the client about the assignment of rights by the supplier to the intermediary.

Recourse factoring means that, after no more than 90 days, the intermediary pays all debt costs to the supplier of the good or service.

If the right to recourse is granted, the factor redirects the unpaid invoices to the client (supplier of the goods) with a demand to make the repayment.

Simple and straightforward factoring scheme

The delivery of goods is carried out according to the scheme with a deferred payment.
Accounts receivable for a specific delivery are assigned to the factoring service provider.
The supplier of the goods (services) receives funds for his sale in the amount of 80-90% of the order amount.
In most cases, the factoring company collects the debt from the buyer and assumes possible risks associated with the insolvency of the debtor (the customer who bought the goods).
On the basis of the invoice, the buyer pays for the goods.
The factoring company transfers the balance of the debt to the seller minus the commission for the service provided.
Why is factoring in demand if there are loans?

There are shops and companies average check which significantly exceeds the average wages in the region of presence. Thus, the majority of potential customers who are really interested in buying must accumulate, find, accumulate a certain amount of funds necessary to purchase the desired thing. It can be about buying a car, furniture, digital or household appliances, payment educational services and things like that.

The factoring company solves the problem of the client's solvency, which is very convenient for the supplier of the goods, who immediately receives most of the due amount and can continue to use the proceeds, and not wait for the client to pay in full for the purchase.

Factoring example

The client purchases goods worth 6,000 rubles. Using the factoring service, he will be able to make four payments of 1,500 rubles each without any overpayments. The supplier instantly receives more than 5,000 rubles, and the intermediary factor transfers the remaining amount after the final settlement with the person who bought the product. Such a scheme seems especially beneficial to the buyer, since in addition to the absence of overpayments, the same product can grow within four months and will cost 7,000 rubles.

What will your company get from factoring?

Factoring has a powerful effect on the growth of sales, increases the average check and gives the customer more freedom. Previously, the buyer had only two options. Pay the entire amount at once or contact the bank for a loan. Thanks to new service a person has a third option, which allows him to buy a product on an installment plan, while paying one-tenth of the cost of the product. The main convenience lies in the fact that the whole procedure takes place in the literal sense, without leaving the checkout.

Implement new technologies in your business. Good luck and Success!