Factoring

Factoring is a complex of financial services that includes not only funding, but also the loan receivable portfolio administration, passed for servicing, as well as monitoring and control of receipts from customers and analysis of the counterparties’ financial condition.

Factoring covers the cash gap, allows the supplier to manage financial flows (since the supplier determines the volume of loan receivable at a given time), but it does not imply an availability of tax security, has the flexible debt schedule and limit policies oriented towards both to the financial condition of the supplier and its plans for business development, opportunity and prospects for new contracts.

The supplier operates in a situation where the debt will be cleared by the customer (i.e. buyer) under the Contract of factoring services. It is unnecessary to accumulate funds on the supplier’s settlement accounts to pay off the next loan tranche. With regard to operational terms, factoring is the most convenient tool for financing the supply chain.