International factoring is the sale of an existing unrecognized or future short-term cash receivable arising from a contract on the sale of goods or the provision of services in foreign trade transactions.
Who is the International Factoring intended for?
- Exporters, primarily middle-sized and large legal entities that have concluded commercial contracts and a cooperation of many years with their clients abroad
- Clients who have the need for additional working capital, but do not wish to borrow
- Clients who want to offer more favorable payment terms to their buyers from abroad
What are the benefits of International Factoring for exporters?
- Financing without taking security funds (mortgage, pledge, bank guarantee)
- Possibility of providing better conditions for clients abroad
- Faster collection of receivables, as well as unobstructed financing of the current business
- Additional working capital, without credit indebtedness
- Increase of export potential due to the use of a flexible source of capital
- Increase in creditworthiness, soundness and profitability of operations
- Liquidity improvement
How can factoring help you in your business?
If you have buyers to whom sell goods or services with a deferred payment period of up to 90 days then factoring in the short-term financing domain is a solution for you.
By selling invoices to the bank, you provide cash funds necessary for unobstructed operations and improvement of current liquidity in the form of advance payment, in a very short period of time, up to 3 days from the date of delivery and signing of contractual documentation.
Who are the Participants of International Factoring?
The Exporter (Seller) is a client of a bank that transfers claims through the Bank arising from a commercial contract in foreign trade
The Importer (Buyer) is a foreign legal entity to whom the goods or services provided on the basis of the contract are delivered and in the future period is obliged to pay receivables by invoices
- The client – the seller of goods/services sells and delivers the goods/services to the debtor – buyer and delivers the invoice
- The client sends a copy of the invoice and other documentation to API bank proving the existence of receivables
- After the analysis of the creditworthiness, the bank and the client sign the contract on the purchase of receivables
- The client shall notify the debtor about the transfer of the claims
- The debtor submits a signed and certified statement to the client
- API Bank pays a deposit to the client in the amount of 70 to 90% of the invoice value minus factoring interest
- After maturity, the debtor pays the total amount of the invoice to the account of the API bank.
- API Bank pays the client a difference of funds in the amount of 30% to 10% of the invoice value
- Submit a list of customers through the standard Questionnaire
- In case of positive approval, API Bank shall submit an offer with the relevant conditions
- After the signing of the Contract on the purchase of receivables, the invoice can be immediately initiated
API Bank calculates the monthly interest in a fixed amount for factoring services, calculated on the amount of paid advance payment for the period of factoring, up to the maturity of each individual invoice. The interest rate is determined depending on the client’s creditworthiness.
The factoring fee includes a one-off fee for the processing of requests for the purchase of short-term receivables and administrative costs for each individual invoice
API Bank a.d. Beograd has allowed its clients to minimize the risk of exchange rate fluctuations through Forward transactions.
Clients are allowed to agree with the API bank on a certain rate, on a specific date and regardless of the course of the rate. In this way, the client is protected because the bank guarantees that the rate will not change, from the one that is contracted.
- Client questionnaire (API bank form)
- Request for the purchase of short-term receivables (API bank form)
- Invoices that are subject to purchase
- Commercial contract, certified and signed by the client and the debtor
- Dispatch notes
- Export control
- Unique customs documents
- Customer’s signed and sealed consent