Selling outstanding accounts receivable to a bank offers many advantages, especially in international trade: more financial leeway, higher levels of security and a lower balance sheet total due to a smaller amount of accounts receivable and less borrowed capital.
As flexible as necessary
Any type of accounts receivable can be purchased, such as trade receivables, rent and lease receivables, leasing receivables, and many more.
Accounts receivable may be purchased subject to the possibility of taking recourse to the seller or not, depending on whether the seller is liable for the correctness and collectability of the accounts receivable or just for their correctness.
As secure as possible
When accounts receivable are purchased without the possibility of taking recourse to the seller (forfaiting), the accounts receivable must have been separated from the underlying transactions, for example by means of a letter of credit, a bill of exchange guaranteed by a bank or a bank guarantee accepted by us.
For mere book receivables, a record of acceptance or a confirmation by the debtor to the effect that no objections will be raised on the basis of the underlying transaction is sufficient.
If the default risk is too high for the purchasing bank and none of the above-mentioned collateral is available, accounts receivable can be purchased on the basis of a G9-type federal guarantee or a policy from a private insurer.
Important parameters
- Volume of at least EUR 150,000 (or equivalent amount, depending on the structure of the underlying transaction)
- Term of at least 60 days
- Accounts receivable can be purchased in any currency eligible for refinancing
- Conditions:
- Interest at the relevant money market rate plus margin
- Refinancing by Oesterreichische Kontrollbank is possible when accounts receivable are purchased on the basis of a G9 guarantee
- Management fee
- Accounts receivable can be purchased on a revolving basis
Forfaiting – the 3 top benefits for you
- Improved liquidity: revenues are immediately available; additional liquidity is available if your credit facility has been fully used
- Risk is passed on when accounts receivable are purchased without the possibility of taking recourse: payment risk, political risk and force majeure are passed on to the purchasing bank; no risk of changes in interest rates due to fixed rates, and no exchange rate risk if invoices are issued in foreign currencies
- Lower balance sheet total: your balance sheet improves due to a smaller amount of accounts receivable and less borrowed capital (depending on accounting standards)