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  • Definition of factoring (according to the Association of Factoring Companies of the Czech Republic)

    Factoring is a modern financial tool which represents an alternative to bank credit for its users. Accounts receivables, which arise to the user of factoring from the supply of goods or services, are the source of financing. Accounts receivables are assigned to the factoring company and in addition to the financing; it also ensures management and collection of accounts receivables for factoring users and range of services up to assuming the risk of default due to insolvency or protracted default of individual customers.

  • Domestic factoring

    It is a purchase, financing, management, collection, or potential insurance of accounts receivables, including reminders for goods or services supplied by the domestic supplier to domestic customers.

  • Export factoring

    It represents a purchase, financing, management, collection, or potential insurance of accounts receivables, including reminders for goods or services supplied by domestic suppliers to foreign buyers.

  • Factoring

    Factoring is an alternative form of financing accounts receivables from deliveries of goods or services. Their maturity is usually between 90 and 120 days. Exceptionally, it can reach up to 180 days. Client agrees that some or all accounts receivables for selected customers will assign to the factoring company. Factoring company provides advance payment in the amount corresponding to the agreed proportion in the agreement. After the payment by the customer on the bank account of the factoring company the transaction is settled and the client receives the rest. It is usually long term cooperation, not a one-time interaction. The funds that factoring user would have usually bound in receivables are continuously at their disposal thanks to the product.

  • Factoring without recourse (= with insurance)

    It means financing, administration, collection and insurance of accounts receivables, including potential reminders. Factoring company bears the risk of insolvency or protracted default of individual customers to the amount of contractual limits and for this purpose cooperates with a commercial insurance company.

  • Factoring with recourse

    It is financing, management and collection of accounts receivables including any reminders when factoring company does not bear the risk of insolvency or protracted default of customers. In case of non-payment of debts by the customer within agreed period of 90 days, accounts receivables are assigned back to the client.

  • Framework (balance) factoring

    This is a product for clients who work flexibly with the structure of assets and liabilities. Assignment of accounts receivables to a factoring company reduces its volume and possibly improves their structure. There is no increase of credit involvement or increase of liabilities. On the contrary, it accelerates cash flow and reduces the overall indebtedness.

  • Import factoring

    It allows foreign supplier of domestic customer to obtain short-term financing without issuing any type of hedging instrument like a bank guarantee, letter of credit, bills, etc.

  • Purchase of receivables

    The purchase of receivables means purchase, funding, management and collection of short-, medium- or long-term accounts receivable. The minimum amount of purchased receivables usually ranges around CZK 5 million. Their minimum payment period is usually 180 days or longer, and their payment can be arranged by means of a payment schedule. This product is suited to individual or repeated transactions. The accounts receivable may be purchased with or without recourse to the original owner of the receivable.

  • Retail factoring

    It is designed for clients with less invoicing volume (up to 30 million CZK per year), whose business is based on a regular supply of goods or services to selected customers. This modification is accompanied by a narrower range of information and documents required for the contract.

  • Reverse factoring

    This type of factoring supports business cooperation between companies of different sizes and financial strength. Creditworthy customer bears business risk from the most of the part. He acknowledges assigned receivables by the supplier to the factoring company in writing on regular basis.


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