Factoring is a financial product, which implies the provision of delivery (or the provision of services) from the Supplier to the Buyer with a deferred payment.
What types of banking are factoring?
This financial product is two kinds:
1. Without rehressora.
With this service,, bank (factoring company) provides funding to 100% of the cost of goods delivered (executed works) and in case of non-production buyer it bears all the risks. The use of such a scheme is likely to large industrial companies, who have a high enough credit rating.
2. With regressor.
With this service,, bank (company) provides funding 60-90% of the cost of goods delivered (executed works) on the postponement of the period increased by N number of days (N – value is determined individually, depending on each specific case). If the buyer does not make payment on time, then the money to a financial institution, he is obliged to pay the supplier products.
What are the benefits?
- Sales growth. During this operation,, no need to wait, when the consumer has to pay for the goods. Funding is made upon delivery of the shipment of goods documents. These funds can be sent to the purchase of goods for resale, which will lead to an increase in the company's revenue.
- Reduction of cash shortages.
- The probability of obtaining financing without collateral.
- This financial product is not a loan, means and credit companies load does not rise.
The requirements for obtaining a bank
Get funding for the service can be described if:
- the agreement provides for the postponement of payment on 30-180 days;
- buyers of goods or services are:
- Companies in which the owner is the state (RT, FGUP, MUP);
- industrial companies, which operate according to the official statements, and preferably those, that are part of large financial-industrial holdings;
- Major federal and regional retailers.
Scheme of factoring agreement between Bank, supplier and the buyer
In this scheme involved three parties:
- bank or company,
- the buyer or customer.
Buyer supplier signed a contract for the supply of goods with deferred payment.
The factoring agreement is made between the supplier and the bank to provide cash for the period of delay, taking into account the increase in the number of N days.
About tom, that the agreement is designed to inform the buyer of products. He signs the notification, and therefore agrees to transfer finance for the goods received in a bank account open factoring.
Product, which was stipulated in the contract, comes the supplier to the buyer. Upon receipt of the product, supplier receives documents, confirming delivery. This documentation is sent to the bank to obtain funds, under the terms of the contract (the amount and timing).
At the end of the payment delay, The buyer pays the Supplier the agreed contract sum of money to the factoring bank account.
change, that can, to adapt to, you can not change.
How much does factoring?
This operation is provided on a fee basis, where the payer is a supplier of goods. Payment is made for use and is calculated as the interest rate depending on the term. Additionally disburse different kind of commission. approximately, without taking into account specific customer, the history of its relations with banks and other important factors, the rate of such a service is 11-12% per annum.
Important! When signing a contract you need to specify in advance the interest rate and all possible additional fees, that may arise in the course of the contract.
The factoring agreement example
- Provider: LLC "PROTON".
- Type of product: Factoring with recourse.
- Customer: JSC "South cable".
- products: phone hubs.
- Deferment of payment: 90 days after delivery.
- financial institution: Bank B..
- The percentage of funding: 90 % the supply amount.
- time: 30 + 90 days = 120 %.
- The amount of delivery: 10 million. rubles.
- "Proton" Ltd. has signed a contract with JSC "South cable" for the supply of telephone concentrators, the amount of the deal 120 million. rubles, the sum of the first delivery 10 million. rub., deferment of payment 60 days.
- LLC "PROTON" concludes with the bank under the factoring agreement concluded contract, notify the JSC "South cable".
- "Inter" is buying the first batch of telephone hubs, and delivers them "Southern cable". After checking quality, device configuration, authorized person of the buyer passes the prorevizirovannye documents, which are supported by the facts of delivery devices.
- On the basis of documents – invoices, waybill – Bank disburse supply in the amount of 9 million. rubles (90 %).
- JSC "South cable" makes a payment for products delivered after 90 days 100 % the amount to the bank account of the factoring company "PROTON". Bank of the amount received holds put him under the contract payments and final balance transfers to the bank checking account LLC "PROTON".
On video below – description of the service and the discussion of the merits and shortcomings, application for the banking business contract.