Purchase of accounts receivable in exchange for immediate financing (Factoring) is a transaction when one party, the Bank (Factor) shall undertake the obligation to support the Creditor in the Creditor’s relations between the same and the Debtor (Payer) by payment of the discounted amount of the Debtor’s liability to the Creditor. Factoring transactions are targeted at the provision of financial assistance to the supplier which implies the payment of the total amount due for goods, works and services supplied. Such payment shall be effected by the Bank which acquires the accounts receivable.
Deferment of payment is a significant competitive advantage in the fight for customers which facilitates the growth of sales of any company. However, commodity credits lead to insufficiency of working assets and increased nonpayment risk. Purchase of accounts receivable in exchange for immediate financing (Factoring) enables to keep the working capital and to minimize risks.
Factoring transactions require agreements with you and your customers which contain deferment-of-terms provisions related to the goods supplied (works performed, services rendered).
Contact the Directorate for Credit Transactions (+375 (17) 209-47-50, 209-47-61) for more detailed information.