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

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

2 FACTORING AGENDA What is factoring? How does it Work? Who can use factoring? Advantages/Benefits How much does it cost? A new Approach!

3 AGENDA What is factoring? Who can use factoring? How does it Work? Advantages/Benefits How much does it cost? A New Approach!

4 FACTORING DEFINITION Factoring is a package offered by the Factor to a Seller wherein against assignment of Seller s receivables to the Factor (with notification of assignment to the Buyers), the Seller may benefit: 1. Sales/ Invoice Ledgering 2. Debt Collection 3. Risk Protection 4. Financing

5 AGENDA What is factoring? How does it Work? Who can use factoring? Advantages/Benefits How much does it cost? A new Approach!

6 HOW DOES IT WORK? 1. Parties involved SELLER Business opportunity BUYER Factor (LFC)

7 HOW DOES IT WORK? 2. Limit request SELLER Contract Negotiations / Purchase order BUYER Limit request Assignment notification Answer Factor/LFC Credit assessment

8 HOW DOES IT WORK? 3. Factoring & finance SELLER Shipment BUYER Invoice assignment Collection process Finance (up to 90%) Factor/LFC

9 HOW DOES IT WORK? 4. Collection SELLER BUYER Invoice settlement Payment Factor/LFC

10 AGENDA What is factoring? How does it Work? Who can use factoring? Advantages/Benefits How much does it cost? A new Approach!

11 WHO CAN USE FACTORING? Small/ Medium size companies All companies offering credit terms up to 120 days to a relatively stable number of corporate buyers. Traders; Manufacturing; Industrial equipment; Garments; Food & Beverages; Chemicals Service Providers; The receivables must result from contracts completely fulfilled by the seller and therefore be unconditional and enforceable.

12 WHEN FACTORING APPLIES? Open account sales Continuous relationship/ Steady buyers base Clear/Clean performance [no sale or return, no consignment, no counter sales, no performance claims] Clear sales title & enforceable receivables [no legal constraints, clear ownership of the goods] Spread of buyers [ not all eggs in one basket ]

13 What is factoring? How does it Work? Who can use factoring? Advantages/Benefits How much does it cost? A new Approach! AGENDA

14 Benefits FEATURES Invoice/Sales Ledger Collection of Receivables Credit Risk Protection Financing Credit Management Open Account Terms BENEFITS Personalized reporting Professional Collection Bad Debt Protection Non-recourse (Off B/S) Debtors Pre-assessment On going credit Monitoring Competitive Commercial Terms

15 What is factoring? Who can use factoring? How does it Work? Advantages/Benefits How much does it cost? A new Approach! AGENDA

16 HOW MUCH DOES IT COSTS? Service Charges Financing + = Charges TOTAL Set-up fee [once for the initial set-up] Factoring commission [on the turnover] Credit checking [annual fee per debtor] Handling charge [per document, where applicable] Other [if the structure of the facility requires, where applicable] On funds-in-use [on a daily balance] Influencing factors Annual turnover Number of invoices Number of debtors Payment terms Industry

17 What is factoring? Who can use factoring? How does it Work? Advantages/Benefits How much does it cost? A new Approach! AGENDA

18 A New Approach Our factoring is designed to be user friendly and less intrusive. How? Instead of requiring you to factor all of your receivables, we look to factor individual flows to a few of your customers. We can sign a factoring agreement to factor invoices for as few as three of your customers. They can all be in one country or in different countries. We are looking to help you where you need the help.

19 Forfaiting vs Factoring Exactly the Same but different in every way! FORFAITING Medium to Long over 180 days 10 years Incremental Sales One off transaction Anonymous 100 % discounting Without Recourse Negotiable Instrument 100, plus FACTORING Short Term up to 120 days Ongoing relationship between buyer and seller Facility Notification required Up to 90 % advances With, Limited or Without Recourse Invoice based (Normally) No Minimum Size

20 THANK YOU New York GMT-5 S. Paulo GMT-4 London GMT Malta GMT+1 Istanbul GMT+2 Cairo GMT+ 2 Moscow GMT+5 Dubai GMT+4 Mumbai GMT+5:30 Singapore GMT+7 / (212)

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