Reverse Factoring

Product
Summary

Unlike traditional factoring, where a supplier wants to finance his/her receivables, Reverse Factoring is a financing solution initiated by the ordering party (buyer) in order to help his/her suppliers to finance their receivables more easily and at a lower interest rate than what they would normally be offered.

The Reverse Factoring method is similar to the Factoring (Factoring in normal mode or traditional Factoring) as it involves three actors:

• The ordering party
• The supplier
• The Factor (the finance company or bank)

Reverse Factoring is a financial solution in which the invoices of suppliers duly accepted by the client (buyer) are factored. In the case of Reverse Factoring, the client is the buyer and the factoring agreement is between the buyer and the factor. In Reverse Factoring since funds are released to and in the name of the suppliers after the buyer (client) duly accepts the invoices, the performance risks of the suppliers are obviated and the only risk is the creditworthiness of the buyer.

Major
Advantages

• No time wasted on comprehensive loan applications
• Reverse factoring could provide a financial lifeline
• The small supplier can get payment for invoices in a quicker time.
• Reverse factoring would be less expensive than traditional factoring arrangements
• Better cash flow and quicker access to working capital
• Better financial standing, creditworthiness, and solvency
• No material insurance
• Easier to finance seasonal production

What are the
Eligibilities

• Renowned / large local corporations
• Purchase on credit
• Minimum 3 years of continuous business operation
• Minimum 2 years experience of key person(s) of the company in the same line of business.
• Potential business prospects
• Organizations with successful business track records
• Organizations with sound repayment history

Fees &
Charges

• Documentation fee: A nominal fee for documentation of the application process
• Service charge :LankaBangla Finance PLC. applies the most competitive service charge rates in return for costs incurred in maintaining your receivables accounts, realizing collections and similar services.
• Interest :Applied in return for the financing provided by LankaBangla Finance PLC.

Apply
Online