Factoring

WHAT IS FACTORING?

Factoring is a financial instrument by which Faktor – the Agency for Insurance and Financing of Exports of the Republic of Serbia (AOFI) – finances export companies in the short term based on outstanding, undisputed claims, resulting from the sale of goods or services on the foreign or domestic market.

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PARTICIPANTS IN THE FACTORING BUSINESS:

Factor – AOFI Assignor – A seller of goods or services who sells goods to a debtor with a delayed payment term and assigns the claim to the Factor Debtor – Buyer of goods or services

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TYPES OF FACTORING SERVICES PROVIDED BY AOFI TO EXPORTERS:

International export factoring (through one-factor and two-factor work systems) Domestic factoring

ADVANTAGES OF FACTORING:

Improves liquidity – faster collection of receivables through the payment of advance funds provides the necessary funds for paying own obligations and financing production It increases the exporter’s creditworthiness and solvency, without burdening the balance sheet positions and recording in the Credit Bureau Better competitive position of exporters, both with buyers and suppliers, by providing longer payment terms and open sale of goods Security in the collection of claims

FACTORING USERS:

Export-oriented companies that realize annual exports of EUR 100,000 or a proportional amount during the year, regardless of the size of the company Businesses that offer goods on deferred payment or that start business with new customers Companies that have good multi-year programs and quality customers, but do not have enough working capital to finance longer billing periods Small and medium-sized enterprises that do not have enough resources or financial strength to take on additional debt on the financial market Companies that take care of their own liquidity, increasing the speed and quality of collection, as well as working capital for further investments, while simultaneously reducing collection costs and possible losses

HOW FACTORING WORKS:

After the delivery of goods or performed services, the exporter issues an invoice to the debtor The exporter submits to AOFI a copy of the invoice with other accompanying (export) documentation along with a signed notification to the debtor about the assigned claim. Upon submission of complete documentation, AOFI pays advance funds in the amount of up to 95% of the nominal value of the assigned claim minus the cost of the commission Upon the due date of the invoice, and after the debtor’s payment to the AOFI account, the difference between the paid advance and the received payment is paid to the exporter’s account. If the contract specifies the rest of this amount, AOFI can use it to settle the due obligations of the exporter

PHASES OF IMPLEMENTATION OF FACTORING:

The exporter submits a completed questionnaire for factoring with other required documentation listed with the questionnaire AOFI approaches the creditworthiness analysis of the listed debtors from the questionnaire and submits an indicative offer with a list of acceptable debtors After accepting the indicative offer, a proposal is prepared for the Executive Board of AOFI, which makes the final decision After the positive decision of the Executive Board, the factoring contract is signed After signing the contract and assigning claims for approved debtors, AOFI provides financing in accordance with your needs in foreign currency or dinars

PRICE OF FACTORING

Decision on factoring conditions Questionnaire for creating a client’s credit file

DOWNLOAD THE DOCUMENT:

Decision on factoring conditions Questionnaire for creating a client’s credit file