Factoring – instrument for thorough management of trade receivables, involving financing, collection of receivables and a credit coverage option for the risk of trade counterparties’ non-payment.
If you are a manufacturing or a trade company, effecting regular deliveries to its clients under deferred payment terms, ranging from 15 up to 150 days, by means of factoring you could:
Your partnership with UBB Factoring could give you:
If you sell under deferred payment terms, you probably invest substantial administrative resource in the collection of trade receivables. By using the trade receivables’ management and collection service of UBB Factoring you could:
The Factoring product enables you to not only manage effectively your receivables, but also to obtain protection against trade counterparties’ non-payment, within a pre-approved credit limit and up to a pre-approved maximum coverage percentage for the respective payer.
This protection could facilitate your penetration into new markets, increase your trade volumes with existing clients, initiate trade relations with new clients, without taking additional risks.
The seller concludes a factoring agreement with UBB Factoring and informs its buyer in writing of the assignment of all its present and future receivables in favour of UBB Factoring
The buyer confirms to UBB Factoring its consent to the assignment of the receivables and that it is going to transfer the payments under all assigned invoices to an account of UBB Factoring
The seller delivers goods and/or services to buyer, for which it issues deferred payment invoices
Supplier provides copies of the issued invoices to UBB Factoring, along with the delivery documents
UBB Factoring will transfer in advance to the supplier a pre-agreed percentage of the value of the assigned invoices to its current account with UBB
UBB Factoring will administer and collect the receivables, originating from the assigned invoices
The buyer will make a payment, equaling 100% of the value of the invoice to the indicated account of UBB Factoring, the advance payment will repay and will transfer the residual amount to an account of the client
Upon non-recourse factoring, in case of the payer’s non-payment, the Factor company will cover the loss up to the amount of a pre-defined percentage of the receivable’s value and up to a pre-approved credit limit for the respective payer