Factoring

"EUROBANK" presents factoring with recourse in the internal market of Ukraine.

Factoring – financing of a services or goods supplier (Client) by the Bank (Agent). The goods/services supplier in this case provides its goods/services to contract partners (Borrower) under the condition of payment grace period by transferring rights to demand performance of obligation to pay for the provided goods or services.

Factoring

1. A supplier (Client) ships the goods to the buyer under the condition of payment grace period.
2. A supplier (Client) pays for the shipped goods to the account of the Bank (Agent).
3. The Bank (Agent) provides financing within the limit on the day of assignment of rights in accordance with the contract (within the set limit).
4. Buyers (Borrowers) transfer full volume of funds for the received goods to the Bank.
5. The Bank (Agent) makes the factoring payment.

Main pros of factoring:

For clients:

  • Compensation of cash deficiency;
  • Increase in volume of sales;
  • Increase of company’s competitiveness via providing required payment grace period;
  • Possibility to transfer control of full settlement of accounts receivable at the appropriate times to the Bank.

For Borrowers:

  • Increase in volume of sales;
  • Due to the fact that borrowers can use inventory loan facility they don’t have to use bank loan;
  • Possibility to increase product range;
  • Assistance in cooperation with key suppliers.

General framework of loan conditions:

  • General limit of financing: amount of limits on separate borrowers, mainly up to 85% of average accounts receivable for the last 12 months*;
  • Limit for a separate borrower: up to 85% of contract amount with a borrower;
  • Currency of loan: UAH
  • Interest rate: no less than 20%
  • Onetime commission: no less than 1%
  • Term of financing limit: 12 months

Other conditions:

  • Term of advance payment availability: term of payment grace period for invoices according to conditions of a contract that were assigned within factoring agreement but not more than 90 days.
  • Additional term of advance payment availability: extension of payment on assigned rights of demand that are due according to the contract.
  • Security: guarantee of private individuals – founders of a client.

*Amount of financing limit includes limits for regular borrowers (not less than 5) with whom a client has had economic relations for at least 6 months and the ones that match the agent’s requirements for the borrowers limit to be set.