Bank Pekao SA

Definitions

Factoring

What is factoring?

Factoring is a service that converts the invoices with deferred payment terms into cash, i.e. the purchasing and financing of the client's receivables. Factoring service improves liquidity and thanks to the financing of receivables, the company is provided with funds for on-going operations. Factoring is also a line of additional services such as monitoring and settlement of repayments, comprehensive management of receivables or contractors' screening.

Who is factoring for?

  • For companies that are seeking fast and secure financing
  • For those that plan to protect themselves against the risk of customer insolvency
  • For those that intend to eliminate the problem of overdue receivables
  • For those that are looking for flexible and comprehensive financial instruments
  • For those that plan to secure themselves against foreign exchange risk

The subject of a factoring transaction may be accounts receivable:

  • Undisputable and not yet due
  • Arising in domestic or foreign trade
  • Not covered by the prohibition on assignment - and if so, then the permission for assignment is required
  • Duly documented
  • Of a short-term, resulting from trading

What is factoring?

Factoring is a service that converts the invoices with deferred payment terms into cash, i.e. the purchasing and financing of the client’s receivables. Factoring service improves liquidity and thanks to the financing of receivables, the company is provided with funds for on-going operations. Factoring is also a line of additional services such as monitoring and settlement of repayments, comprehensive management of receivables or contractors’ screening.

Who is factoring for?

  • For companies that are seeking fast and secure financing
  • For those that plan to protect themselves against the risk of customer insolvency
  • For those that intend to eliminate the problem of overdue receivables
  • For those that are looking for flexible and comprehensive financial instruments
  • For those that plan to secure themselves against foreign exchange risk

The subject of a factoring transaction may be accounts receivable:

  • Undisputable and not yet due
  • Arising in domestic or foreign trade
  • Not covered by the prohibition on assignment - and if so, then the permission for assignment is required
  • Duly documented
  • Of a short-term, resulting from trading

Factoring is

the funds

The service assures constant access to funds as sales are carried out by the Factor. The funding level depends on the volume of the supplier’s turnover with the buyers covered by the factoring agreement. Cash obtained long before the due date thus dramatically improves the company’s liquidity.

Factoring is

a secure payment

Regardless of the form of the service, factoring improves the safety of trade. In factoring, buyers settle debts much better than is the case outside the service. This is a proof of the disciplinary role of factoring. In addition, in some forms of the service, the Factor assumes in part or in whole the risk of insolvency of buyers. Then the seller does not have to be afraid of bankruptcy or non-payment by the debtor.

Factoring is

information

The factor has 24/7 online access to data on Pekao Faktoring’s IT system. Easy access to information on the billing status, balance control, delayed and overdue payments.

Factoring means

lower operational costs

The tasks related to the management of receivables are shifted to the factor. It is Pekao Faktoring that collects payment from the recipient, notifies the buyer in the event of delays or non-payment, and, in conjunction with the Factor, executes the necessary actions to retrieve the receivables from the contractor. Thanks to these actions, the Factor gets more time and reduces the cost of receivables management.