Factoring - A new way of short term financing

Factoring is a service that allows the collection of receivables prior to their maturity, where the Bank emerge as buyers of their clients’ receivables, giving them the opportunity to promptly obtain the money they will be able to use in business.

Factoring differs from the classic loan by the fact that it includes insurance of payments, besides the financing, as well as a complete collection service, such as filing, bookkeeping etc. Also, in this case, the risk of collection of assigned receivables is divided between client and bank.

The process of financing through factoring is very simple: factor, or bank, which mediates the purchase of receivables from the seller, or the client, is paying him a certain amount of advance payment of an invoice, after which the client has no longer an obligation to wait for payment; he is in possibility to immediately dispose with funds. Bank is waiting for payment from the customer, after which the client pays the remainder of the assigned receivables, used as a guarantee fund in payment of receivables and any related interest and fees.

Domestic factoring is compliant with financial needs of companies that have continued selling in the domestic market and includes the financing of working capital over the advance payment of up to 80% of the value of assigned invoices, credit assessment, administration and collection of receivable.

Procedure is simple:

• Eurobank analyzes of any proposed purchaser and approves the total factoring limit to the seller
  
• The seller signs a factoring contract with the bank and delivers goods or performs customer service and deliver receivables to the bank
  
• The bank pays the seller the agreed advance payment for the pre-assigned invoice and the amount of the invoices, in accordance with the agreement
  
• Upon completion of the process, the buyer pays money to an account in bank