Factoring and forfaiting. International financial settlements

Size: px
Start display at page:

Download "Factoring and forfaiting. International financial settlements 120881-1165"

Transcription

1 Factoring and forfaiting 1

2 Factoring Factoring is a transaction where the exporter sells its receivables to an institution The factoring institution buys the receivables without recourse Due to increased risk factors demand discount on the receivables 2

3 Types of factoring Maturity factoring- the factor pays the exporter at maturity of the accounts receivable Advance factoring- the factor pays the exporter in advance a specified share of the receivables 3

4 The mechanism of factoring (1) The factoring transaction involves three parties: The seller-the exporter The debtor-the importer The factor 4

5 The mechanism of factoring (2) The receivables sold are usually invoices for the delivered products Factoring can take place with or without notification of the debtor In the case of notification the factor carries out the collection, in the case of lack of notification the exporter carries out the collection 5

6 Advantages (1) Factoring is advantageous for exporters because this way they can obtain cash This can especially beneficial if companies struggle with liquidity problems In some industries factoring is the historic method of finance e.g. in textiles or apparel branches 6

7 Advantages (2) Factoring reduces largely the risk of export sales The exporter can offer more attractive transaction terms Exporters are relieved from administration duties 7

8 When to use factoring? Factoring is more expensive than a bank loan It can happen that banks would refuse a loan to an exporter to provide him with cash but a factor would buy his receivables The factor checks the creditworthiness of the debtor and not of the seller Especially beneficial for small exporters 8

9 Would factors always buy the receivables? The credit history of the debtor is a crucial condition The current creditworthiness of the debtor Usually even average credit rating of the debtor is refused by factors 9

10 Is the debtor affected by factoring? Some types of debtors- usually large firms or governments have specified procedures when it comes to transferring the payment from the seller to debtor This matters especially due to the obligation of the factor to perform the collection The distinction between assignment of the responsibility to perform the work and the assignment of funds to the factor influences largely the debtor s processes Sometimes the debtor wants the seller to perform the collection 10

11 Forfaiting (1) A transaction where a forfaiting institution buys withoutrecourse the debt resulting from a trade contract which is due in the future Forfaiting is usually aimed at medium-term capital goods financing The subject of forfaiting transactions are usually fixed assets As this type of goods are usually expensive the financing period may account for several years 11

12 Forfaiting (2) Exporters are not willing to finance importers over such a long period This is why the debt of the importer is sold to forfaiters (usually banks) Forfaiting financing usually refers to transactions exceeding USD For larger transaction more than one forfaiting institutions can be involved 12

13 Forfaiting (3) The forfaiting institution takes over the risk of the sales transaction. The exporter is liable for the quality and reliability of the project The forfaiter has an unconditional payment obligation 13

14 The forfaiting process Source: E. Bishop, op. Cit. 14

15 Does the bank always agree to forfaiting? The bank needs a guarantee that the debt will be paid off The debt should be freely transferable The forfaiting bank requires the debt purchased to be secured by a credible bank guarantee or the importer to be a prime buyer, e.g. government agency or a multinational company 15

16 Required documents The guarantee can take the form of: promissory notes bills of exchange, book receivables deferred payments under a letter of credit 16

17 Forfaiting paper All documents guarantying the transaction e.g. bills of exchange and promissory notes become the property of the forfaiter The documents are called forfaiting papers They are liquid assets with comparatively high yields 17

18 What are the costs of forfaiting?(1) The forfaiting institution demands cash for buying the debt The value of the debt is discounted at a specified rate, The forfaiting institution demands also a risk premium on the transaction 18

19 What are the costs of forfaiting? (2) The discount margin is the one of the principal costs of forfaiting Besides the discount margin the bank charges a commitment fee The discount can be computed as straight discount or discount to yield basis 19

20 Advantages of forfaiting for the exporter Conversion of a credit transaction into a cash transaction Increase of liquidity Risk elimination (market, transaction and political risks) Relieve of administration duties 20

21 Advantages of forfaiting for the importer The flexibility to pay for his goods Deferred payment Fixed interest cost 21

22 Discussion Factoring and forfaiting are withoutrecourse methods of trade finance. Is this always beneficial for the exporter/importer? Name examples when recourse financing would be more beneficial. 22

23 Literature E. Bishop, Finance of international trade, Chapter 10. Publication available via Science Direct Database 23

Financing international transactions. International financial settlements 120881-1165

Financing international transactions. International financial settlements 120881-1165 Financing international transactions 1 Lecture outline Overview of the financing methods Exercises 2 Mode of payment vs. financing trade The mode of payment refers to terms of technical transferring the

More information

Factoring and Forfaiting

Factoring and Forfaiting Factoring and Forfaiting -A fund/fee based financial service Prof. Nishant Dhruv, What is Factoring? Definition: Factoring provides resources to finance receivables as well as facilitates the collection

More information

Forfaiting. An Introduction

Forfaiting. An Introduction Forfaiting An Introduction FINANZ AG ZÜRICH 10 Bleicherweg PO Box 900 CH - 8070 Zurich Switzerland Telephone: +41 1 211 28 30 Telefax: +41 1 211 38 54 www.finanzag.csfb.com Forfaiting is a trade finance

More information

THE BASICS OF FACTORING. A Guide to Understanding Accounts Receivable Financing

THE BASICS OF FACTORING. A Guide to Understanding Accounts Receivable Financing THE BASICS OF FACTORING A Guide to Understanding Accounts Receivable Financing The Basics of Factoring Table of Contents What is Factoring?.. 1 Benefits of Factoring 4 What Types of Businesses Utilize

More information

Bill Discounting. Exporter. Importer BANKING AND TRADE FINANCE TUTORIAL. Importer s Bank. Exporters Bank INDIA FOREX ADVISORS.

Bill Discounting. Exporter. Importer BANKING AND TRADE FINANCE TUTORIAL. Importer s Bank. Exporters Bank INDIA FOREX ADVISORS. Bill Discounting While discounting a bill, the Bank purchases the bill receivable to the Exporter (i.e. Bill of Exchange or Promissory Note) before its due date and credits the value of the bill to the

More information

FORFAITING. A useful tool in Trade Finance

FORFAITING. A useful tool in Trade Finance 1. What is Forfaiting? 2. Which instruments are eligible for forfaiting? 3. Why does the Exporter like the forfaiting tool? 4. What is the advantage for the Importer? 5. Any advantage for the Importers

More information

J. Gaspar: Adapted from Jeff Madura, International Financial Management. Slides by Yee-Tien (Ted) Fu

J. Gaspar: Adapted from Jeff Madura, International Financial Management. Slides by Yee-Tien (Ted) Fu Chapter 19 Financing International Trade J. Gaspar: Adapted from Jeff Madura, International Financial Management 19. 1 Slides by Yee-Tien (Ted) Fu Merchandise Trade Merchandise trade, i.e., exports and

More information

To enable highly rated corporate borrowers to diversify their sources of short term borrowings.

To enable highly rated corporate borrowers to diversify their sources of short term borrowings. COMMERCIAL PAPER (CP) CP is an unsecured money market instrument issued in the form of a Promissory Note and was introduced in 1990. Can now be issued in Dematerialised form. To enable highly rated corporate

More information

FORFAITING A USER'S GUIDE WHAT IT IS, WHO USES IT AND WHY?

FORFAITING A USER'S GUIDE WHAT IT IS, WHO USES IT AND WHY? FORFAITING A USER'S GUIDE WHAT IT IS, WHO USES IT AND WHY? By: John F Moran, Jr. Abstract Italian and West German exporters have long been familiar with Forfaiting and still provide the bulk of the market.

More information

CHAPTER 20 INTERNATIONAL TRADE FINANCE SUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTER QUESTIONS AND PROBLEMS

CHAPTER 20 INTERNATIONAL TRADE FINANCE SUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTER QUESTIONS AND PROBLEMS CHAPTER 20 INTERNATIONAL TRADE FINANCE SUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTER QUESTIONS AND PROBLEMS QUESTIONS 1. Discuss some of the reasons why international trade is more difficult and risky

More information

Subject. PAPER No. : Financial Management MODULE No. : Factoring services

Subject. PAPER No. : Financial Management MODULE No. : Factoring services Subject Paper No. and Title Module No. and Title Module Tag Paper No.8: Financial Management Module No. 36: Factoring services COM_P8_M36 TABLE OF CONTENTS 1. Learning outcomes 2. Introduction 3. Mode

More information

FORFAITING IMPROVE YOUR CASH FLOW & MITIGATE RISK - WHILE OFFERING YOUR CUSTOMERS EXTENDED PAYMENT TERMS

FORFAITING IMPROVE YOUR CASH FLOW & MITIGATE RISK - WHILE OFFERING YOUR CUSTOMERS EXTENDED PAYMENT TERMS Financing International Sales using Forfaiting Presented by Gregory Bernardi LFA FORFAITING IMPROVE YOUR CASH FLOW & MITIGATE RISK - WHILE OFFERING YOUR CUSTOMERS EXTENDED PAYMENT TERMS 1 FORFAITING AGENDA

More information

Xynergy Commercial Capital LLC

Xynergy Commercial Capital LLC Xynergy Commercial Capital LLC How Can Work For You The Problem Short of cash and must pay suppliers, lease, bills and salaries? No need for stress, get your payments in advance for your invoices and pay

More information

Class 4: Option Trading - Part 1. 1. Assessing Risks and Rewards. Foundations of Stocks and Options Class 4: Option Trading - Part 1.

Class 4: Option Trading - Part 1. 1. Assessing Risks and Rewards. Foundations of Stocks and Options Class 4: Option Trading - Part 1. Today s Class Assessing the risks in stocks Renting your stock Insuring your stock How Options work Class 4: Option Trading - Part 1 1. Assessing Risks and Rewards Benefits of Buying Stock (Long) You own

More information

International Sales Finance Solutions

International Sales Finance Solutions International Sales Finance Solutions Global Transaction Services Cash Management Trade Services and Finance Securities Services Fund Services International Sales Finance Solutions Financing Tools to Support

More information

128 SU 3: Financial Accounting I

128 SU 3: Financial Accounting I 128 SU 3: Financial Accounting I 3.5 FINANCIAL ASSETS AND LIABILITIES Definitions 1. Financial assets include cash, equity instruments of other entities (e.g., preference shares), contract rights to receive

More information

Management of Receivables

Management of Receivables Management of Receivables Different costs involved in maintaining the debtors: 1. Interest. 2. Discount. 3. Collection Charges. 4. Bad Debts. Different approaches of calculating Interest: Total Cost approach.(priority)

More information

THE CONCEPTUAL FRAMEWORK OF FACTORING ON SMALL AND MEDIUM ENTERPRISES

THE CONCEPTUAL FRAMEWORK OF FACTORING ON SMALL AND MEDIUM ENTERPRISES THE CONCEPTUAL FRAMEWORK OF FACTORING ON SMALL AND MEDIUM ENTERPRISES Minaxi Rani Assistant Professor (Extn.), Department of Commerce, Govt. College for women P.G. College, Hisar, Haryana, (India) ABSTRACT

More information

THE EVOLVING FACE OF FACTORING. By Harvey S. Gross

THE EVOLVING FACE OF FACTORING. By Harvey S. Gross THE EVOLVING FACE OF FACTORING By Harvey S. Gross There is a common belief that companies factoring their receivables do so only when they are in trouble. Nothing could be further from the truth. Since

More information

FACTORING IMPROVE YOUR CASH FLOW & SECURE YOUR DEBTS. Presented by Gregory Bernardi

FACTORING IMPROVE YOUR CASH FLOW & SECURE YOUR DEBTS. Presented by Gregory Bernardi FACTORING IMPROVE YOUR CASH FLOW & SECURE YOUR DEBTS Presented by Gregory Bernardi FACTORING AGENDA What is factoring? How does it Work? Who can use factoring? Advantages/Benefits How much does it cost?

More information

Contents. Why is export finance needed? What types of export finance are available? Which currencies can be borrowed? How are risks managed?

Contents. Why is export finance needed? What types of export finance are available? Which currencies can be borrowed? How are risks managed? Contents Why is export finance needed? What types of export finance are available? Which currencies can be borrowed? How are risks managed? What terms of interest apply? Is state-supported financing a

More information

practical information

practical information practical information hermes cover special Refinancing of officially supported export receivables march 2012 practical information hermes cover special Refinancing of officially supported export receivables

More information

FACTORING AND FORFEITING. the faster way to get your money

FACTORING AND FORFEITING. the faster way to get your money FACTORING AND FORFEITING the faster way to get your money 3 CONTENTS FACTORING 4 DOMESTIC FACTORING 5 1. Supplier s factoring (Reverse factoring) 5 2. Selective factoring with right of recourse 6 3. Individual

More information

OUR PRODUCTS. ARTEMIDA-DIJANA FACTORING - your debtor s discount bill of exchange. HESTIJA-VESTA FACTORING own bond discounting to meet obligations

OUR PRODUCTS. ARTEMIDA-DIJANA FACTORING - your debtor s discount bill of exchange. HESTIJA-VESTA FACTORING own bond discounting to meet obligations OUR PRODUCTS PALETTE I: you have turned commercial loan into financial loan: ARTEMIDA-DIJANA FACTORING - your debtor s discount bill of exchange ATENA-MINERVA FACTORING cession sale HESTIJA-VESTA FACTORING

More information

Meaning & Definitions Aspect of Credit Management Objectives of Accounts Receivables Management Advantages of Trade Debtors Management Costs of

Meaning & Definitions Aspect of Credit Management Objectives of Accounts Receivables Management Advantages of Trade Debtors Management Costs of Management of Accounts Receivable Meaning & Definitions Aspect of Credit Management Objectives of Accounts Receivables Management Advantages of Trade Debtors Management Costs of Maintaining Accounts Receivables

More information

Factoring. Turn your accounts receivable into immediate cash. www.creditbank.com

Factoring. Turn your accounts receivable into immediate cash. www.creditbank.com Factoring Turn your accounts receivable into immediate cash www.creditbank.com The 3 "S" Save time & money Streamline cash flow Secure cash collection What is Factoring? How beneficial is it for my business?

More information

AGENDA ITEM XI: CONSUMER CREDIT

AGENDA ITEM XI: CONSUMER CREDIT SCREENING CHAPTER 28 Country Session: LEGAL BASIS LAW NO. 4077 ON CONSUMER PROTECTION AMENDED BY LAW NO. 4822 (OG No: 25048, 14 March 2003) Came into force on 14 June 2003 BY-LAW ON RULES AND PROCEDURES

More information

MANAGING CREDIT RISK IN A VOLATILE MARKETPLACE

MANAGING CREDIT RISK IN A VOLATILE MARKETPLACE Export Forum 2015 October 14, 2015 MANAGING CREDIT RISK IN A VOLATILE MARKETPLACE Presented by: George Babeu, President One Source Risk Management and Funding, Inc. WHAT WE WILL DISCUSS Today s volatile

More information

List of Financial Services An Excerpt of the GST Act

List of Financial Services An Excerpt of the GST Act List of Financial Services An Excerpt of the GST Act In accordance to the Fourth Schedule of the Goods and Services Tax (GST) Act, a supply of services shall be treated as an exempt supply where the services

More information

1. Rationale. 2. Statutory Power

1. Rationale. 2. Statutory Power 1. Rationale Unofficial Translation With courtesy of the Association of International Banks This translation is for the convenience of those unfamiliar with the Thai language Please refer to the Thai text

More information

LAW ON FOREIGN EXCHANGE OPERATIONS

LAW ON FOREIGN EXCHANGE OPERATIONS LAW ON FOREIGN EXCHANGE OPERATIONS This Law shall govern: (Consolidated) 1 I. BASIC PROVISIONS Article 1 1) payments, collections and transfers between residents and non-residents in foreign means of payment

More information

18 BUSINESS ACCOUNTING STANDARD FINANCIAL ASSETS AND FINANCIAL LIABILITIES I. GENERAL PROVISIONS

18 BUSINESS ACCOUNTING STANDARD FINANCIAL ASSETS AND FINANCIAL LIABILITIES I. GENERAL PROVISIONS APPROVED by Resolution No. 11 of 27 October 2004 of the Standards Board of the Public Establishment the Institute of Accounting of the Republic of Lithuania 18 BUSINESS ACCOUNTING STANDARD FINANCIAL ASSETS

More information

Atradius Presents: Financing and Business Insurance Part 2: Introduction to Credit Insurance. Brett Halsey President

Atradius Presents: Financing and Business Insurance Part 2: Introduction to Credit Insurance. Brett Halsey President Atradius Presents: Financing and Business Insurance Part 2: Brett Halsey President Introduction to Credit Insurance Atradius Presents Introduction to Credit Insurance What is Credit Insurance? Definition

More information

BANKING UNIT POLICY DOCUMENTS

BANKING UNIT POLICY DOCUMENTS BANKING UNIT POLICY DOCUMENTS POLICY DOCUMENT ON THE REGULATORY PROVISIONS FOR THE UNDERTAKING OF LENDING ACTIVITIES BY INSTITUTIONS AUTHORISED UNDER THE FINANCIAL INSTITUTIONS ACT 1994 FACTORING FORFAITING

More information

How to guarantee collections and payments

How to guarantee collections and payments DOCS How to guarantee collections and payments 01 Introduction 02 Factoring 03 Confirming 04 Forfeiting 05 06 Credit insurance Conclusions and More information Barcelona Activa SAU SPM, 1998-2009 01. Introduction

More information

LESSON 13: FACTORING THEORETICAL FRAMEWORK

LESSON 13: FACTORING THEORETICAL FRAMEWORK LESSON 13: FACTORING THEORETICAL FRAMEWORK Lesson Objectives To understand the Concept of Factoring. Methodology of Factoring and Forfeiting. Types of factoring. Introduction Receivables constitute a significant

More information

Rosy Blue International SA

Rosy Blue International SA For more information, please contact: Mark Stout +32 2 417 41 98 Enzo Soi + 32 2 417 35 51 Securitisation, KBC Bank This Information Memorandum is dated 30 November 2010 Rosy Blue International SA USD

More information

Albanian legal framework on Factoring contract

Albanian legal framework on Factoring contract Albanian legal framework on Factoring contract Anjeza Liçenji, MSc, PhD Candidate Faculty of Law, University of Tirana, Albania Kestrin Katro, Prof. As. Dr. Faculty of Law, University of Tirana, Albania

More information

Leveraging Supply Chain Finance to Optimize Value

Leveraging Supply Chain Finance to Optimize Value Leveraging Supply Chain Finance to Optimize Value Brad Peterson +1 312 701 8568 bpeterson@mayerbrown.com Massimo Capretta +1 312 701 8152 mcapretta@mayerbrown.com David A. Ciancuillo +1 312 701 7258 dciancuillo@mayerbrown.com

More information

Transport Insurance for International trade

Transport Insurance for International trade Transport Insurance for International trade 1) International trade insurance indemnifies importers and exporters against various types of losses, including damage to goods in transit, products injuring

More information

Factoring. To explain nature, function and types of factoring. To dilate upon modus operandi of factoring.

Factoring. To explain nature, function and types of factoring. To dilate upon modus operandi of factoring. Learning Objectives: Factoring To explain nature, function and types of factoring. To dilate upon modus operandi of factoring. To bring out potentiality of factoring as a source of finance. To highlight

More information

2011 Meridian Partners Limited. Meridian Partners Trade Financing

2011 Meridian Partners Limited. Meridian Partners Trade Financing Meridian Partners Trade Financing About Us Meridian Partners provides you with the legal requirements of a registered office address in Hong Kong, a corporate secretary, telephone, fax and mailing services.

More information

NATURE OF FACTORING. www.factors-chain.com/home www.factoring.org

NATURE OF FACTORING. www.factors-chain.com/home www.factoring.org NATURE OF FACTORING www.factors-chain.com/home www.factoring.org A US DEFINITION: a continuing arrangement between a factoring concern and the seller of goods or services on open account, pursuant to which

More information

Toll Free: 1.888.XPORTSK (9767875) (in North America) Email: inquire@sasktrade.sk.ca www.sasktrade.sk.ca

Toll Free: 1.888.XPORTSK (9767875) (in North America) Email: inquire@sasktrade.sk.ca www.sasktrade.sk.ca These manuals are created as resource guides for members of Saskatchewan Trade and Export Partnership (STEP). For more information on these manuals please contact Saskatchewan Trade and Export Partnership

More information

ACCOUNT DEBIT CREDIT Accounts receivable 10,000 Sales 10,000 To record the sale of merchandise to Sophie Company

ACCOUNT DEBIT CREDIT Accounts receivable 10,000 Sales 10,000 To record the sale of merchandise to Sophie Company CURRENT RECEIVABLES Receivables are the amount owed to the organization by its customers and/or others. Current receivables will be collected within one year or the current operating cycle which ever is

More information

1 Regional Bank Regional banks specialize in consumer and commercial products within one region of a country, such as a state or within a group of states. A regional bank is smaller than a bank that operates

More information

C. Valuing Accounts Receivable.

C. Valuing Accounts Receivable. C. Valuing Accounts Receivable. 1. Valuing receivables involves reporting them at their cash (net) realizable value. Cash (net) realizable value is the net amount expected to be received in cash. 2. Uncollectible

More information

The Evolution of Factoring: New Competition for B2B Payments

The Evolution of Factoring: New Competition for B2B Payments The Evolution of Factoring: New Competition for B2B Payments Presented by Sarsha Adrian, Senior Consultant Graber Associates LLC 1 Graber Associates LLC Founded in 2002 Financial Services and Technology

More information

ROLE OF TRADE FINANCE

ROLE OF TRADE FINANCE Volume 3, Issue 5 (May, 2014) Online ISSN-2277-1166 Published by: Abhinav Publication Abhinav National Monthly Refereed Journal of Research in ROLE OF TRADE FINANCE Hemanshu Kapadia Proprietor, Practicing

More information

What is a Structured Settlement? Straight talk about structured settlements

What is a Structured Settlement? Straight talk about structured settlements Woodbridge Structured Funding LLC What is a Structured Settlement? Straight talk about structured settlements Learn more about structured settlements: Why settled personal injury cases are often paid out

More information

Chapter 8. Reporting and Analyzing Receivables

Chapter 8. Reporting and Analyzing Receivables Chapter 8 Reporting and Analyzing Receivables Study Objective 1 - Identify the Different Types of Receivables The term receivables refers to amounts due from individuals and companies. Receivables are

More information

What is a Structured Settlement: WOODBRIDGE STRUCTURED FUNDING, LLC

What is a Structured Settlement: WOODBRIDGE STRUCTURED FUNDING, LLC 2014 What is a Structured Settlement: WOODBRIDGE STRUCTURED FUNDING, LLC STRAIGHT TALK ABOUT STRUCTURED SETTLEMENTS WOODBRIDGE STRUCTURED FUNDING, LLC Learn more about structured settlements: Why settled

More information

Simply put, factoring is a transaction where a company sells its invoices at a discount in exchange for quick funds.

Simply put, factoring is a transaction where a company sells its invoices at a discount in exchange for quick funds. Imagine your growing business just made a six-figure sale to a company across the country. The problem? The buyer has 60 days to pay, but your cash flow is limited, meaning you can t afford the immediate

More information

Emerging and Developing of Forfeiting.

Emerging and Developing of Forfeiting. Emerging and Developing of Forfeiting. Some specific characteristics. Human And Social Sciences at the Common Conference Adamova Karine Docent (Lecturer) at The Department of Financial Markets and Financial

More information

LAW ON FOREIGN CURRENCY TRANSACTIONS. ( Official Herald of the Republic of Serbia, Nos. 62/2006 and 31/2011) I GENERAL PROVISIONS

LAW ON FOREIGN CURRENCY TRANSACTIONS. ( Official Herald of the Republic of Serbia, Nos. 62/2006 and 31/2011) I GENERAL PROVISIONS LAW ON FOREIGN CURRENCY TRANSACTIONS ( Official Herald of the Republic of Serbia, Nos. 62/2006 and 31/2011) The present Law shall govern: I GENERAL PROVISIONS Article 1 1) payments, collections and transfers

More information

Arranging insurance backed trade finance structures

Arranging insurance backed trade finance structures Arranging insurance backed trade finance structures London Countertrade Roundtable Ian Henderson 21 March 2012 Current environment Economic environment Bank liquidity: Fewer global players active in trade

More information

LAW ON FOREIGN EXCHANGE OPERATIONS

LAW ON FOREIGN EXCHANGE OPERATIONS LAW ON FOREIGN EXCHANGE OPERATIONS This Law shall govern: (CONSOLIDATED) 1 I. BASIC PROVISIONS Article 1 1) payments, collections and transfers between residents and non-residents in foreign means of payment

More information

FACTORING AGREEMENT INSTRUMENT FOR CREDIT INSTITUTIONS

FACTORING AGREEMENT INSTRUMENT FOR CREDIT INSTITUTIONS AGORA International Journal of Juridical Sciences, www.juridicaljournal.univagora.ro ISSN 1843-570X, E-ISSN 2067-7677 No. 4 (2013), pp. 138-142 FACTORING AGREEMENT INSTRUMENT FOR CREDIT INSTITUTIONS C.

More information

Click Here to Buy the Tutorial

Click Here to Buy the Tutorial FIN 534 Week 4 Quiz 3 (Str) Click Here to Buy the Tutorial http://www.tutorialoutlet.com/fin-534/fin-534-week-4-quiz-3- str/ For more course tutorials visit www.tutorialoutlet.com Which of the following

More information

International Trade Financing and Risk Management Manual

International Trade Financing and Risk Management Manual International Trade Financing and Risk Management Manual Website: www.aepcindia.in For query please contact: Ms. Vanni Mehta, ecocell@aepcindia.com Incorporated in1978, (AEPC) is the official body of apparel

More information

ISO20022 Trade Services Dashboard Description of business processes. ISO20022 - Trade Services Description of Business Processes

ISO20022 Trade Services Dashboard Description of business processes. ISO20022 - Trade Services Description of Business Processes ISO20022 Trade Services Dashboard Description of business processes 1 Trade Services Description of Procurement: Sub-Functions Tendering Ordering Delivering Invoicing Process for buyer to contact potential

More information

Discounting, Factoring & Forfeiting

Discounting, Factoring & Forfeiting Discounting, Factoring & Forfeiting Introduction Bill Discounting Factoring- Meaning & Definition Modus Operandi Terms of Agreement Functions Types of Factoring Factoring Vs Discounting Cost of Factoring

More information

Invoice Factoring, Debtors Discounting and Trade Finance are bridging facilities using your debtors, stock or movable assets to raise cash.

Invoice Factoring, Debtors Discounting and Trade Finance are bridging facilities using your debtors, stock or movable assets to raise cash. Dear Sir / Madam, Re Bridging Facilities Invoice Factoring, Debtors Discounting and Trade Finance are bridging facilities using your debtors, stock or movable assets to raise cash. A key element is that

More information

Selling Your Small Business Administration (SBA) Loans To Coastal Securities. March 2014

Selling Your Small Business Administration (SBA) Loans To Coastal Securities. March 2014 Selling Your Small Business Administration (SBA) Loans To Coastal Securities March 2014 The Role of the Lending Bank Lending Bank - retains customer relationship as they continue to service their SBA loans.

More information

CA CPT SAMPLE PAPER FUNDAMENTAL ACCOUNTING (60MARKS)

CA CPT SAMPLE PAPER FUNDAMENTAL ACCOUNTING (60MARKS) CA CPT SAMPLE PAPER FUNDAMENTAL ACCOUNTING (60MARKS) 1. Which of the following provide frame work and accounting policies so that the financial statements of different enterprises become comparable? (a)

More information

Arte Bunkering OÜ Annual Report 2014

Arte Bunkering OÜ Annual Report 2014 ANNUAL REPORT 2014 Contents Management report 3 Annual accounts 4 Balance sheet 4 Income statement 5 Cash flow statement 6 Statement of changes in owner s equity 7 Notes to annual accounts 8 Note 1. Accounting

More information

Chapter 19. Financing International Trade. Lecture Outline

Chapter 19. Financing International Trade. Lecture Outline Chapter 19 Financing International Trade Lecture Outline Payment Methods for International Trade Prepayment Letters of Credit Drafts Consignment Open Account Trade Finance Methods Accounts Receivable Financing

More information

SBA EXPORT EXPRESS LOAN PROGRAM

SBA EXPORT EXPRESS LOAN PROGRAM SBA EXPORT EXPRESS LOAN PROGRAM Patrick Hayes, Regional Manager SBA Export Solutions Group U.S. Export Assistance Center 600 Superior Avenue, Suite 700 Cleveland, OH 44114-216-522-4731 patrick.hayes@sba.gov

More information

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. ECON 4110: Sample Exam Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Economists define risk as A) the difference between the return on common

More information

Simple Interest. and Simple Discount

Simple Interest. and Simple Discount CHAPTER 1 Simple Interest and Simple Discount Learning Objectives Money is invested or borrowed in thousands of transactions every day. When an investment is cashed in or when borrowed money is repaid,

More information

Chapter 32. 32-1 What Is a Secured Credit Transaction? 32-2 How Are Security Interests Perfected and Terminated?

Chapter 32. 32-1 What Is a Secured Credit Transaction? 32-2 How Are Security Interests Perfected and Terminated? Secured and Unsecured Credit Transactions 32-1 What Is a Secured Credit Transaction? 32-2 How Are Security Interests Perfected and Terminated? South-Western, a part of Cengage Learning Slide 1 32-1 What

More information

Altium Structured Settlement Investments (SSI s)

Altium Structured Settlement Investments (SSI s) What is an Altium Structured Settlement Investment or SSI? Altium SSI s are streams of court ordered cash payments, paid by an Insurance Carrier, the payer, to a plaintiff who won a personal injury lawsuit.

More information

Model Answer. M.Com IV Semester. Financial market and financial services. Paper code- AS 2384

Model Answer. M.Com IV Semester. Financial market and financial services. Paper code- AS 2384 Model Answer M.Com IV Semester Financial market and financial services Paper code- AS 2384 1. (I) Money Market is a market for short term loans or financial assets. As the name implies it does not deal

More information

DEBTOR FINANCE: So you are interested in Debtor Finance but you re not exactly sure what it is or how it works.

DEBTOR FINANCE: So you are interested in Debtor Finance but you re not exactly sure what it is or how it works. DEBTOR FINANCE: So you are interested in Debtor Finance but you re not exactly sure what it is or how it works. You need Debtor finance so that you can receive cash straight away to fuel your business

More information

Having cash on hand is costly since you either have to raise money initially (for example, by borrowing from a bank) or, if you retain cash out of

Having cash on hand is costly since you either have to raise money initially (for example, by borrowing from a bank) or, if you retain cash out of 1 Working capital refers to liquid funds used to purchase materials and pay workers. This is in contrast to long term capital such as buildings and machinery. Part of working capital management is cash

More information

Revenue Recognition. Contents. Accounting Standard (AS) 9

Revenue Recognition. Contents. Accounting Standard (AS) 9 84 Accounting Standard (AS) 9 Revenue Recognition Contents INTRODUCTION Paragraphs 1-4 Definitions 4 EXPLANATION 5-9 Sale of Goods 6 Rendering of Services 7 The Use by Others of Enterprise Resources Yielding

More information

ACCA Paper F7. Financial Management. theexpgroup.com

ACCA Paper F7. Financial Management. theexpgroup.com Thank you for downloading this extract from our ExPedite notes to accompany your free online Course in a Coffee Break. To download a free complete set of our ExPress notes please visit www.. Good luck

More information

Non-traded financial contracts

Non-traded financial contracts 11-1 Introduction Financial contracts are made between lenders and borrowers Non-traded financial contracts are tailor-made to fit the characteristics of the borrower In business financing, the differences

More information

International Factoring. Milan, 2014

International Factoring. Milan, 2014 International Factoring Milan, 2014 Agenda UBI FACTOR What is Factoring International Factoring Differences between Factoring and Banking Mutual Benefits 2 A Leader in the Italian and European Factoring

More information

Trade Credit Insurance Bad Debt Protection

Trade Credit Insurance Bad Debt Protection Bad Debt Protection What is? > Coverage provided to companies who sell products to other businesses (b2b) on short-term credit (30/60/90 days) for both domestic and export sales > Indemnification for bad

More information

Accounts Receivable and Inventory Financing

Accounts Receivable and Inventory Financing Accounts Receivable and Inventory Financing Glossary Accounts Payable - A current liability representing the amount owed by an individual or a business to a creditor for merchandise or services purchased

More information

BA 351 CORPORATE FINANCE. John R. Graham Adapted from S. Viswanathan LECTURE 5 LEASING FUQUA SCHOOL OF BUSINESS DUKE UNIVERSITY

BA 351 CORPORATE FINANCE. John R. Graham Adapted from S. Viswanathan LECTURE 5 LEASING FUQUA SCHOOL OF BUSINESS DUKE UNIVERSITY BA 351 CORPORATE FINANCE John R. Graham Adapted from S. Viswanathan LECTURE 5 LEASING FUQUA SCHOOL OF BUSINESS DUKE UNIVERSITY 1 Leasing has long been an important alternative to buying an asset. In this

More information

CHAPTER 28 RECEIVABLES MANAGEMENT AND FACTORING

CHAPTER 28 RECEIVABLES MANAGEMENT AND FACTORING CHAPTER 28 RECEIVABLES MANAGEMENT AND FACTORING Q.1 Explain the objective of credit policy? What is an optimum credit policy? Discuss. A.1 The objective of credit policy is to promote sales up to that

More information

Treatment of COD Income by Partnerships

Treatment of COD Income by Partnerships Treatment of COD Income by Partnerships Stafford Presentation January 28, 2015 Polsinelli PC. In California, Polsinelli LLP Allocation of COD Income COD income is allocated to those partners who are partners

More information

Factoring in Turkey. Çağatay Baydar General Manager of TEB Faktoring A.Ş. Vice Chairman of FCI

Factoring in Turkey. Çağatay Baydar General Manager of TEB Faktoring A.Ş. Vice Chairman of FCI Factoring in Turkey Çağatay Baydar General Manager of TEB Faktoring A.Ş. Vice Chairman of FCI Factoring in Turkey First factoring company established in 1990 Today; around 75 factoring companies Minimum

More information

PRESENTATION ON FACTORING BY GLOBAL TRADE FINANCE LIMITED 19.06.2007. Global Trade Finance Ltd

PRESENTATION ON FACTORING BY GLOBAL TRADE FINANCE LIMITED 19.06.2007. Global Trade Finance Ltd PRESENTATION ON FACTORING BY GLOBAL TRADE FINANCE LIMITED 19.06.2007 o Incorporated in March 2001 o o o o ABOUT GTF India s first International Factoring Company RBI has accorded registration and Authorised

More information

READING 1. The Money Market. Timothy Q. Cook and Robert K. LaRoche

READING 1. The Money Market. Timothy Q. Cook and Robert K. LaRoche READING 1 The Money Market Timothy Q. Cook and Robert K. LaRoche The major purpose of financial markets is to transfer funds from lenders to borrowers. Financial market participants commonly distinguish

More information

INTRODUCTION TO OPTIONS MARKETS QUESTIONS

INTRODUCTION TO OPTIONS MARKETS QUESTIONS INTRODUCTION TO OPTIONS MARKETS QUESTIONS 1. What is the difference between a put option and a call option? 2. What is the difference between an American option and a European option? 3. Why does an option

More information

Marketing Consultancy Division (MCD) Export Consultancy Unit (ECU) Export in Focus. Jumada Awal, 1428 (May, 2007)

Marketing Consultancy Division (MCD) Export Consultancy Unit (ECU) Export in Focus. Jumada Awal, 1428 (May, 2007) Marketing Consultancy Division (MCD) Export Consultancy Unit (ECU) Export in Focus Factoring & Forfaiting Jumada Awal, 1428 (May, 2007) 1 Factoring & Forfaiting While the business opportunities associated

More information

Pivotal Issues When Managing. Chapter 7. Cash and Receivables. Skyline College Lecture Notes. Cash Considerations. Cash Requirements.

Pivotal Issues When Managing. Chapter 7. Cash and Receivables. Skyline College Lecture Notes. Cash Considerations. Cash Requirements. Chapter 7 Cash and Receivables Skyline College Lecture Notes Pivotal Issues When Managing Cash and Receivables 1. Cash needs 2. Credit policies 3. Level of accounts receivable 4. Financing receivables

More information

Customer financing in Brazil Guide for a Finnish SME exporter

Customer financing in Brazil Guide for a Finnish SME exporter Customer financing in Brazil Guide for a Finnish SME exporter Contents Financial markets 2 Know your customer 3 Prepayments received from the buyer 4 Granting payment terms with invoice 5 Bills of exchange

More information

How should banks account for their investment in other real estate owned (OREO) property?

How should banks account for their investment in other real estate owned (OREO) property? TOPIC 5: OTHER ASSETS 5A. REAL ESTATE Question 1: (December 2008) How should banks account for their investment in other real estate owned (OREO) property? Detailed accounting guidance for OREO is provided

More information

information foreign customers

information foreign customers information foreign customers imports from germany march 2012 information foreign customers imports from germany Do you import goods and services from Germany? In this case the Export Credit Guarantees

More information

Factoring Guide. Understanding the Principles

Factoring Guide. Understanding the Principles Factoring Guide Understanding the Principles This report introduces factoring topics that every factoring candidate should know. It provides a concise, easy to understand presentation of the factoring

More information

Using Accounts to Interpret Performance

Using Accounts to Interpret Performance Using s to Interpret Performance ing information is used by stakeholders to judge the performance and efficiency of a business Different stakeholders will look for different things: STAKEHOLDER Shareholders

More information

Preuzeto iz elektronske pravne baze Paragraf Lex

Preuzeto iz elektronske pravne baze Paragraf Lex www.paragraf.rs Preuzeto iz elektronske pravne baze Paragraf Lex Ukoliko ovaj propis niste preuzeli sa Paragrafovog sajta ili niste sigurni da li je u pitanju važeća verzija propisa, poslednju verziju

More information

Accounting and Reporting Policy FRS 102. Staff Education Note 2 Debt instruments - Amortised cost

Accounting and Reporting Policy FRS 102. Staff Education Note 2 Debt instruments - Amortised cost Accounting and Reporting Policy FRS 102 Staff Education Note 2 Debt instruments - Amortised cost This Staff Education Note was updated on 27 October 2015 as a result of the issuance of Staff Education

More information

Concept Paper Factoring

Concept Paper Factoring Concept Paper Factoring Co-create. Innovate. Win. 2 1.0 INTRODUCTION 3 1.1. Trade transaction 3 1.2. Discounting Vs. Factoring 4 2. 0 FACTORING 4 2.1. Parties in Factoring 4 2.2. The Factoring Process

More information

insurance companies pension funds building societies

insurance companies pension funds building societies 1. Depository institutions - BANKS commercial banks credit unions savings and loan associations 2. Contractual savings institutions insurance companies pension funds building societies 3. Investment intermediaries

More information