Factoring

Proposition of the TFB “Kontrakt” on rendering of services on factoring

What do we offer?

   Our Bank offers services on financing of current assets  by way of acquisition of rights to receipt of future payments for delivered goods (factoring). Factoring is a possibility for a supplier company immediately to turn its debts into cash means without credit procedures and lodging of security in the amount of 95% of the indebtedness.

Why should it be we?

As of today the CFB “Kontrakt” renders factoring services based on the individual approach to every client. We are ready to adapt the factoring service pattern in accordance with Your conditions of business conduct. The cost of our services is on the market level and is lower than prices of several banks rendering analogous services.

But! Only our bank offers the following unique terms:

Factoring term – up to 180 days,

The term during which the Bank is ready not to insist on receipt of cash means from a retailer in addition to contract liabilities to a supplier– up to 30 days.

Why is it profitable for a retailer?

1.      Possibility of increase in billing time with suppliers while preserving stability of deliveries from them, receipt, in fact, of free of charge replenishment of own current assets.

2.      Increase in market opportunities of the company on the market. Deficit of current assets restricts possibilities of the supplier to provide competitive adjournments of payment, as well as keep sufficient assortment of goods in the warehouse. Affording an opportunity for suppliers to obtain the major part of payment for delivered goods immediately, without waiting for payment date, a retailer may involve those suppliers, cooperation with whom was impossible because of their lack of current assets. Thus, a retailer obtains new opportunities on selection of suppliers, offering them more profitable conditions than the existing ones. The given opportunity is especially actual while working with minor suppliers who are not able to insure stability of production deliveries without immediate payment from a retailer, and in the course of placing new groups of products on the market, the turnover period of which has not been examined yet, or is obviously long.

3.      A retailer receives a guarantee of protection from claims on the part of suppliers, caused by arrears of payments.

4.      Our Bank is ready not to insist on receipt of cash means from a retailer in the course of the specified time-limits in addition to contract liabilities to the supplier. In this case, the bank services payment is realized by a Retailer.

Benefits for Supplier

Provision of finance against the security of trade debts. Factoring facility does not require financial maintenance of a client that gives new credit opportunities & reduces charges of the client on this facility.

Factoring bridges cash gaps. Individual schedule of transactions allows client get money at the same day with necessary amount value. Client has an opportunity to manage cost value & maturity date of credit resources.

Tremendous benefit to expanding business.  Additional financing of a working capital of a client gives him an opportunity to expand seller's market. Company has an opportunity to cooperate with new retailers, to extend stock on hand and as a result to increase his turnover and income. It also concerns big companies during seasonal growth of sales.

Bank takes next risks:

• Risk for non payment for delivered goods by Retailer;

• Risk for aged payments for delivered goods by Retailer;

• Risk for interest rate burst;

• Risk for changing of exchange rate during the maturity time.

Costs

There are two main costs in factoring which are briefly explained below:

Administration Charge - this is a factoring fee for the administration of the sales ledger and is expressed as a percentage of the invoice value. This varies depending on the workload to the factor but is normally between 0.5% and 1.5%.

Discount Charge - this is the cost of money advanced against the sales ledger and works like Interest in that it is charged as a percentage above Bank Base Rate and is normally no more expensive than an overdraft facility.

Contact information:

Sergey Germanovskiy, phone: +38 044 537-61-27

e-mail: client@kontrakt.ua