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Factoring - a method of financing current assets

Factoring - a method of financing current assets

Factoring enables to:

  • Improve cash flow and financial indicators
  • Raise competitiveness and sales volumes of your products, by offering more flexible payment terms to your debtors
  • Improve buyer payment discipline
  • Achieve the evaluation of the credit capacity of your customers and to reduce the risk;
  • Secure yourself against loss in the event of insolvency of your foreign (European, US) debtors (debtor risk insurance).

The immediate payment of the invoices that the seller has drawn up for the buyer in accordance with the conditions of the Factoring contract is the basis of factoring transactions.

Factoring enables you to raise current assets by handing your debtors' debts over to SEB leasing and receiving immediate payment for the supplies of goods made or services provided in return. Further payment of the invoices by the buyers is organised by SEB leasing.

We offer both domestic and export factoring service


 

Step 1. The Seller sells goods or provides services to the particular Buyer.

Step 2. The copy of the invoice drawn up for the Buyer is submitted to the Factor.

Step 3. The Factor pays up the bill to the Seller in the amount of up to 90 % of the invoice sum.

Step 4. The Buyer transfers the sum of the invoice to the Factor in the amount of 100% within the particular term of payment.

Step 5. The Factor pays the outstanding reserve of the sum of the invoice to the Seller.

 

Factoring is a set of services made up of:

  • Funding - You will receive the funding in the form of current assets at the moment when you sell the goods or provide the service to your buyer. Your buyer will repay the debt to SEB leasing within the established payment term. Financing by means of factoring does not require collateral. The right of claim against your buyer serves as collateral.
  • Administration of bills - the bookkeeping of bills and invoices and the control of payment terms will be performed by SEB leasing. At the end of the month you will receive a detailed report on the transactions performed, as well as you will be able to track the payments of your buyers daily via Internet bank.
  • Minimising risks - SEB leasing, will use its database and expertise to analyse and track the solvency of your buyers, thus reducing the risks of unnoticed insolvency of the buyer.

Export factoring

If your company exports its products to foreign companies, the export factoring service will be suitable for you.

If you choose export factoring with debtor risk insurance, you will reduce you risk of incurring losses in the event the buyer cannot pay up for longer periods of time or it becomes insolvent. Since the seller can never be completely certain of the solvency of a company registered abroad, factoring with debtor risk insurance is especially suitable in this case.

You may opt for regressive export factoring, if you are confident about the solvency of your buyer and are ready to assume full liability for it.

For the seller and exporter:

  • Factoring application (PDF)
  • Registration, VAT, Taxpayer certificates and Articles of association
  • audited statement of the previous year (balance, profit/loss account), operative review of the current year at the end of the last quarter
  • Mutual cooperation contracts concluded with the buyers
  • Passport copy of the representative of the company with signatory rights and the document confirming signatory rights
  • If required - the business plan of the company
  • Description of company operation

You can learn more and apply for factoring services by contacting your transaction manager or by calling the Customer Centre on the telephone +371 26668777.

You may apply for a free consultation.

Conditions

  • The term of a factoring contract is up to 12 months.
  • The deferral of payment that can be offered to buyers by means of factoring is up to 120 days.
  • Immediate payment of the bills to the Seller is in the amount of up to 90 % of the invoice sum.

Pricelist

Services Fees
Review of the factoring application Free of charge
Commission fee for the drawing up of the factoring contract documentation 0,1%-1,5% of the total factoring limit,
min 426.86 EUR + VAT
Commission fee for the incorporation of amendments in the factoring contract:
   •  increasing of the limit 0,1%-1,5% of the increased factoring limit,
min 213.43 EUR + VAT
   •  change of the advance rate starting from 99.60 EUR + VAT
   •  change of the deferred payment term starting from 99.60 EUR + VAT
   •  addition of a new buyer starting from 99.60 EUR + VAT
   •  other amendments to the factoring agreement starting from 99.60 EUR + VAT
Commission fee for the drawing up of the factoring contract 0,1%-1,5% of the total factoring limit,
min 284.57 EUR + VAT
Commission fee for the administration of invoices:
   •  regressive starting from 0,1% of the invoice sum + VAT
   •  with debtor risk insurance starting from 0,35% of the invoice sum + VAT
Provision of accounting references 28.46 EUR + VAT
Provision of non-standard references 56.91 EUR + VAT
Issue of document copies from the archive 28.46 EUR + VAT

 

Entrepreneur service plans

Beneficial package of services for everyday transactions

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