Factoring is a modern financial service which includes short-term financing of companies based on redemption of future outstanding receivables arising from sale of goods and services.
Cash funds are available immediately upon sale of accounts receivable to the bank which instead of you collects payments i keeps records on receivables. In certain cases, accounts receivable insurance is also available.
If you sell goods or provide services on deferred payment terms up to 180 days, you have long-term cooperation with your buyers/debtors, and you need additional working capital – factoring is ideal solution for you.
How does factoring function?
You deliver goods / provide services to the buyer and invoice them.
You submit to us a copy of the invoice and supporting documentation which proves existence of receivables.
Based on the submitted documentation, we execute to you an advance payment in the amount of the usual 80% of transferred invoice value on the same or on the next day.
At maturity date, the buyer makes payment to the account of Sberbank Serbia a.d.
After receipt of payment, we forward to you the rest of 20% deducted by the factoring costs on the same day.
Advantages of factoring
Factoring improves flow of your funds, turning your invoices in liquid funds available on the same or next day.
A flexible funding source that grows in line with the increase of your sales.
You pay interest only on the amount of used funds.
There is no need to hire human resources for collection of receivables, because our team of experts will deal with it and report regularly on its status
At the same time, you get the opportunity to take advantage of the available time and resources in a more efficient way.
In case of non-recourse and export factoring, your receivables are insured against risk of inability to collect receivables.
No additional security instruments are necessary for financing, since the receivables themselves represent security.
Your credit indebtedness does not deteriorate by using factoring and it is not recorded in the Credit Bureau report.
Steps in factoring
You submit to us filled-in application for factoring, with supporting documents specified in the request.
After conducting the analysis, Sberbank will submit to you an offer and a list of eligible customers. The offer will include both the total approved limit under the contract, as well as limits for each customer individually.
In case of accepting the offer, our team will prepare a proposal containing all the information about the factoring transaction and forward it for approval.
Upon receiving the approval, we will provide you with the Factoring Contract to sign it.
On the basis of transferred receivables, Sberbank will pay you the agreed advance payment, reduced by factoring commission.
You can choose whether you will be making direct payments on the basis of interest at the agreed time or the interest will be deducted from the first following advance payment after completion of calculation.
Price of factoring
Factoring commission covers collecting services, keeping records on receivables, their insurance and similar. They represent fixed cost and are calculated by the agreed percentage at full value of transferred receivables.
Factoring interest is calculated at the amount of used advances for actual number of days of their use. The more timely your buyers pay invoices, the lower will the interest cost be.
For more information on this offer, you can contact Trade Finance Department, phone number 011/2098-662.