Factoring
It offers administrative-financial services to companies. By means of a contract, the company (referred to as creditor) assigns their short term commercial invoices to the factoring entity (debtors). The following services are provided:
- Analysis of the degree of solvency of the debtors, classification and allocation of risk.
- Administration of the accounts to charge, providing periodic information on the state of the account for each debtor.
- Administering charging the invoices to the debtor.
- Guarantee in the case of debtor insolvency (factoring without resources).
- Financing: advance of funds on assigned invoices awaiting payment..
The insolvency risk cover is 100% of the discounted debt.
There is no quantitative or sector-based limit regarding commercial loans which can be assigned in factoring. What usually happens is:
- They originate in sales by means of supplying products, preferably mass produced, solid, liquid or gaseous.
- The goods or products sold should not be immediately perishable.
- Payment conditions should be short term (90 days, also 120 or 150).
- The importer’s country, when factoring export or foreign sales, should be highly solvent and politically stable.
- The debt should be administered as an invoice, independently of the means of payment.