Besondere Wünsche
Videoberatung
Specific requirements
Factoring Basics
Legal Basics: German Banking Act §§ 13-19, 21 / German Civil Code §§ 433 ff
Functions of Non-Recourse Factoring
- Financing:
The factoring company advances the receivables immediately up to 90 % of the invoice value.
- Del Credere Cover:
The factoring company reviews the credit rating of the clients and assumes the credit risk within client limits.
- Debtor Management:
Upon request, the factoring company manages the accounts receivable and takes over the dunning and collection procedure.
How does Factoring Function?
Factoring Variations
| Full-Service | Smart-Service | Inhouse | |
|---|---|---|---|
| Product Characteristics | |||
| Immediate liquidity (up to 90 % of the invoice value) | ✓ | ✓ | ✓ |
| Acceptance of 100 % of del credere risk | ✓ | ✓ | ✓ |
| Debtor Management | ✓ | ✓ | — |
| Dunning and Collection | ✓ | collection | collection |
| Type of Factoring | |||
| Open Factoring | ✓ | ✓ | ✓ |
| Tacit Factoring | — | ✓ | ✓ |
| Target Customers | |||
| Capacity of the accounting department | low | medium | good |
| IT infrastructure | low | good | good |
| Turnover (normally) | up to 20 mio. € | up to 20 mio. € | minimum of 10 mio. € |
| Number of invoices | medium | medium | high |
| Dunning and Collection | optimization required | established dunning | high number of positions |
Which Advantages does Factoring Offer?
Optimizing your Working Capital
- Corporate expansion due to immediately available liquidity instead of a high level of outstanding accounts
- Financing on the basis of accounts receivable
- Evaluating up to 90 % of the gross amount invoiced
- Same day availability from invoices submitted to the factoring company
- Financing matched to turnover, even with fluctuations in raw material prices
- Flexible retrieval of liquidity
- Opportunities for opening up foreign markets
- Using cash discount, rebate and bonus options
Minimizing Bad Debts
- The factoring company takes over the buyer’s risk of receivables up to 100 %
- Close review and proof of information on debtors
- Fast check on creditworthiness of new end users
- Permanent risk monitoring by the factoring company
Improving Key Indicators of the Balance Sheet
- True sale of accounts receivable
- Improving the equity ratio
- Improving the overall value of the corporation
- Optimizing the cashflow
- Retrieval of liquidity is possible on defined effective dates
