The basic advantages of the factoring for the seller:
Reception without debt of financing for updating turnaround means in volume up to 90 % from the sum shipped and outstanding debtors of the goods (given services executed works);
The granting debtors of a delay of payment, which will not affect on short-term liquidity of balance of the client and condition of his accounts with the creditors;
Increase of standard items debtors on conditions of the commodity credit;
Increase of quantity of the potential buyers;
A covering financial is brave, connected with a delay of payment:
- Risk of delayed payment of deliveries by the buyers,
- Risk of non-payment of deliveries by the buyers (in a case without factoring recourse),
- Risk of change of a currency rate during the period of a delay of payment on delivery,
- Risk of sharp change of market cost of money resources;
The improvements of payment ability of the supplier of the goods (works, services) for realization of duly accounts with the creditors, that promotes strengthening of a financial position and business image.
The basic advantage of the factoring for the buyer:
- Reception from the supplier of production (services, works) with a delay of payment (commodity credit);
- The decrease of expenses on financing payment of deliver (factoring of service is paid by the supplier);
- Increase of volumes of purchases without attraction of the additional capital;
- Decrease is brave receptions of the poor-quality goods.
Advantages of the factoring in comparison with the credit and overdraft:
At crediting the client collides with the following features of financing and expenses:
- The client (as a rule) can not open the demand line of credit in several banks;
- The credit comes back by the borrower;
- The credit is given on concrete term and for the sum beforehand stipulated by the contract;
- The credit is given under a pledge;
- The creditor does not render to the client of additional services;
- The percents for usage by financing make 18-23 % annual;
- Maintenance of the credit - notarial registration 0,1 % from cost of debt property;
- Expert estimation of a pledge (the traveling and living expenses) is in paid;
- Insurance of debt property – percent (interest) from cost (up to 1,5 % for property, up to 6 % for a vehicle) and in addition insurance financial is brave (1- 5 % of cost);
- Commission for consideration / registration of the document;
- Commission for distribution of financing.
At overdraft the client collides with the following features of financing and expenses:
- The credit comes back by the borrower;
- Term of usage is limited (about one month);
- Overdraft provides maintenance by the client of the certain movement of money resources on current to the account;
- The limit is established depending on volumes of receipts on the current account of the client;
- The bank does not render to the client of additional services.
The client has following advantages in factoring:
- The payment for factoring financing makes 0,07 - 0,1 % per day;
- The duty of the client is repaid at the expense of means, which are paid it by the debtors;
- The financing is carried out for the term of an actual delay of payment (commodity credit);
- The financing, as a rule, does not require maintenance;
- The size of financing is not limited and can be increased;
- The financing is accompanied by management of debts and control of duly payment of debtors’ deliveries granting of the reports about a condition of debts;
- It is not required of additional expenses arising at crediting or overdraft service of the client by bank.
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