Types of receivables financing agreements

The company assigns its invoices to a factor, which provides financing, collection, and management of the accounts receivable.

The company selects the invoices it wishes to assign, enabling more targeted and flexible financing.

Financing is calculated on the overall accounts receivable balance, rather than on an invoice picking basis.

In the event of customer non-payment, the company is required to reimburse the financing advance to the factor.

The risk of non-payment is fully transferred to the factor, which assumes any potential loss.

Customers are informed of the invoice assignment, but the company retains responsibility for managing its accounts receivable and collections.

Designed to improve financial statement presentation, this structure allows receivables to be removed from the company’s balance sheet.

Customers are not informed of the factor’s involvement, and the commercial relationship remains unchanged.