4.3.1. Factoring
Factoring is a type of trade and commission operation, combined with lending to the client's working capital, associated in any form with the assignment by the client to the supplier of the factoring department of the bank of unpaid payment requests (invoices) for the delivered goods (services) and the right to receive payment for them, that is , collection accounts receivable client.
The purpose of factoring operations is the timely collection of debts to reduce losses in the event of a delay in payment, the provision of a loan in the form of prepayment of settlement documents. V this case the bank (or the factoring company) undertakes to pay the amount of payment requests provided to it, regardless of whether the supplier's counterparties have paid their debts.
There are two types of factoring services:
Factoring with financing - the supplier receives a certain part of the amount of settlement documents immediately after the assignment of the debt;
Factoring without funding - cash are transferred into circulation to suppliers after the normal period of document flow (as a rule, 2-3 days).
It is important in the transaction to determine the maximum amount for factoring operations, within which the delivery of goods can be made without the risk of non-receipt of payment.
In foreign practice, three methods are used for setting limit amounts:
a) determination of the general limit within which the factoring department automatically pays for the settlement documents assigned to it;
b) determination of monthly limits;
c) insurance of certain transactions, when the peculiarity of the supplier's activity consists in carrying out certain large transactions. In this case, the contract amount is not limited, and the risk of the transaction is amortized by the insurance transaction.
It is traditional for factoring to pay for a part of settlement documents - 70-90% of their value, the supplier receives the rest of the amount after payment of settlement documents by the debtor.
Factoring relationships are built on the basis of a contract. The peculiarity of domestic practice is that in most cases banks enter into an agreement with the right of recourse. In this case, after a certain time (2 months), the bank can return the settlement documents to the supplier, if the payer refused to fulfill his obligations.
Factoring transaction commissions consist of two elements:
1) service fee - set as a percentage of the transaction amount. In foreign practice, it varies within 0.5-3.0%. When concluding a contract with the right of recourse, a discount is made.
2) payment for the provided credit funds, subject to prepayment (interest for the loan). The interest rate is usually slightly higher than the market rate.
A factoring agreement may provide for the provision of additional services: accounting services, legal services, consultations.
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Factoring is a type of trade and commission operation, combined with lending to working capital.
The main purpose of factoring services is the collection by the factoring company of the accounts receivable of its customers and the receipt of payments due in their favor.
Debtor - a debtor organization; accounts receivable - the amount owed to the enterprise by other organizations.
Lender - the organization that issued the loan; accounts payable - the amount that the company must pay to other organizations.
Encashment - the bank accepting obligations to pay its client the amount owed to him.
Receiving factoring services solves the problems associated with finding sources of capital financing, because Turns a deferred sale into an immediate payment sale.
There are three participants in factoring operations: the first is the factoring company (financial agent), the second is the supplier (client-creditor), and the third is the debtor (buyer).
When carrying out factoring operations between the supplier and the factoring company, a bilateral agreement is concluded. Under this agreement, the factoring company buys invoices (receivables) from the supplier on the terms of immediate payment of 80-90% of the shipment cost, i.e. the supplier's working capital is advanced. From the moment of purchase of payment documents, the factoring company undertakes (collects) obligations to demand payment from the buyer for the products delivered to him.
The cost of factoring services for a supplier company consists of such elements as:
Insurance reserve... This is a part of the value of receivables that remains with the factoring company until the debtor pays the payment claims (its value is 10-20%). At the end of the term of the factoring agreement, provided that the debtor fulfills his obligations, the factoring company returns the amount to the supplier insurance reserve... If the payer is unable to pay off his obligations, the amount of the insurance reserve will not be reimbursed to the supplier. In this case, the losses are divided between the supplier (in the part of the insurance reserve) and the factoring company (in the part of the remaining unpaid claims).
Commission remuneration. This is the factoring company's maintenance fee for the client accounting and carrying out settlement transactions.
Interest for using a factoring loan... This is a payment to the factoring company for its purchase of payment slips. Credit relations take place here, since the supplier receives an advance of 90-80% of the value of the payment claims before the due date for them.
The commission and interest are charged by the factoring company at the time of the advance payment (when purchasing receivables).
V modern conditions, when many organizations have significant accounts receivable, including for a period of more than 1 year, the development of factoring in Russia will help improve their financial condition, and, consequently, stabilize and raise the domestic economy.
Factoring is a type of trading and commission operation, combined with lending to the client's working capital.
The factoring (factor) operation is based on the purchase by the bank of invoices (payment requests) of the supplier for the shipped products and the transfer by the supplier to the bank of the right to demand payment from the buyer of the products.
Therefore, factoring transactions are also referred to as vendor sales credits or vendor factoring credits. Commercial banks, developing factor loans, receive additional opportunity expand its operations, increase profit margins, and strengthen customer relationships. There are two types of factoring: conventional (open) and confidential (hidden). In conventional factoring, the supplier indicates on his invoices that the claim has been sold to the factoring firm. In case of confidential factoring, none of the supplier's counterparties is aware of the crediting of his sales by the factoring company. Therefore, the cost of confidential factoring operations is higher than conventional ones, and much more expensive than other bank loans. Factor operations were also widely developed when exporting products. With export factoring, the client enjoys a 100% guarantee to receive all payments on his invoices. Factoring operations in countries market economy special factor companies are engaged, which, as a rule, are closely associated with banks or are their subsidiaries. Classic factoring, as it is carried out in Western European countries, is based on a commercial loan in the form of a deferred payment (from 30 to 90 days) for the delivered products or the application of this form to the balance between the seller and the buyer, as an open account. In this case, the supplier ships the product to the buyer, sending the goods and shipping documents to his address, and the amount of the debt is debited to the account opened by him in the name of the buyer. By open account the buyer pays off his debt within the terms established by the contract (monthly, once a quarter or half a year). The supplier provides the buyer with a loan on an open account and settlements in the form open account associated with the risk of non-payment or late payment for products, since the buyer upon receipt trade documents does not issue any promissory notes to the supplier. In these circumstances, the relationship between counterparties is risky for one or both parties. The factoring company (factor company) assumes this risk. Factoring service contributes to the timely collection of debts and minimization of losses from late payments; prevents the appearance doubtful debts; provides assistance to enterprises in credit management, creates best conditions for successful production activities, I which allows businesses to increase turnover and profitability. I A factoring company, becoming the owner of unpaid claims, assumes the risk of non-payment. Supplier receiving payment from a factor deadlines, can plan settlements with its creditors, receiving a discount from the latter when paying an invoice at a time specified for it. The discount (or "cash discount") for immediate payment of the invoice (within 5-10 days) is about 3% in many Western countries. Thus, the use of factoring accelerates the receipt of payments, guarantees repayment of debts, reduces the cost of maintaining accounts and ensures the timely receipt of payments to suppliers in case of temporary financial difficulties for the buyer. In modern conditions, the factoring service system includes the provision of a variety of services to the client, in particular accounting, information, advertising, sales, legal, etc. Clients of a factoring company may refuse to retain the staff of employees performing the same functions as the factoring company. This creates some cost savings that, combined with the benefits of lending, offset the relatively high cost of service. Organization of factor services by the commercial banks of our country. For commercial banks, factoring is a new, non-traditional type of service, which is gradually beginning to gain recognition from the bank's clients. Factoring operations must be carried out by specially created departments, and in small banks - in groups. It is not recommended to carry out factoring operations by employees of the operating department on a part-time basis, as well as one-time operations without concluding permanent contracts. This is due to the fact that factoring services include not only lending to the supplier, but also monitoring and monitoring its financial condition and the creditworthiness of its payers. The resources necessary for the factoring department can be formed at the expense of its own and borrowed funds. The relationship between them is established by the board of the bank. The factoring department receives its own funds from its bank, and in the future their growth occurs due to the profit from the operations carried out. Borrowed funds are formed by attracting funds from enterprises, deposits from other banks and loans from their own bank. Factorial customer service is carried out on a contractual basis. Before the conclusion of the contract, the factoring department analyzes the supplier's creditworthiness, collects, studies information about financial condition his debtors. In order to reduce the risk of factoring operations, the supplier from the standpoint of the factoring department must meet the following requirements: to produce products and services that are in demand and of high quality; have a steady rate of production growth; apply firmly established conditions for the sale of manufactured products. It is not recommended to carry out factoring operations according to the requirements budgetary organizations; for debt obligations of individuals; for the obligations of enterprises not using bank loan or declared insolvent, as well as for the obligations of branches or divisions of enterprises; with compensation and barter transactions;
when paying for work in stages or in advance; under sales contracts, when the buyer has the right to return the products within the time specified in the contract, as well as subject to after-sales service.
More on the topic 48. FACTORING OPERATIONS OF COMMERCIAL BANKS:
- Economic characteristics of the resources of commercial banks
- 54. Commercial banks, their role in the monetary system. Commercial Bank Operations
- 1.3.1. Credit operations of a commercial bank in the structure of banking assets
- Leasing, factoring and trust operations of commercial banks in Ukraine
- 4. Active operations of commercial banks and their classification. Contract account loan.
- 28. Active operations of commercial banks on the example of leasing, factoring
- 27 Commission and intermediary operations of a "commercial bank"
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Factoring is a type of trade and commission operation aimed at solving the problem of shortage working capital the client for making settlements with his partners.
In the classical version, factoring is a multipurpose operation associated with short-term lending to a client through the purchase of debt obligations from buyers of products or suppliers of raw materials and equipment; insuring clients against the risk of non-payment by their partners; control over the financial condition of suppliers and the solvency of buyers; organization of accounting for the movement of products and payments for it, as well as advising clients in terms of sales and advertising of goods, works, services.
World experience shows that in the 60s of the XX century, factoring operations began to gradually replace commercial loan based on bills. Factoring developed especially rapidly in the 80s, when over 10 years its turnover grew 74 times in Italy, 14 times in Spain, and 7.5 times in Great Britain and France ("Economy and Life", No. 27, July 1996, Appendix, page 9).
In Russia, after the publication of a letter from the State Bank of the USSR "On the procedure for cession by a supplier to a bank of the right to receive payment for payment requests for goods supplied, work performed and services rendered" (No. 252 dated 02.12.89), it became possible to conduct factoring operations by commercial banks ... The right of banks to this type of activity ("the acquisition of the right of claim from third parties and
fulfillment of obligations in cash ") fixed the federal law"About banks and banking in the Russian Federation ”(Article 5, Clause 6 - Transactions). Somewhat earlier, in 1988, Promstroybank of the USSR, as an experiment, created factoring departments and began to carry out operations. Later, other commercial banks joined it. However, the first experience of factoring was not entirely successful and revealed a number of problems:
the operations of discounting payment claims carried out by banks actually had little to do with full-fledged factoring services;
insufficient attention was paid to the work on attracting funds for factoring, in particular, deposits of citizens, funds of economic structures. Due to the certain isolation of factoring departments, this issue has acquired particular importance;
analysis of the structure of funds used for factoring revealed their irrational allocation, since more than half of the resources were directed to the payment of wages to employees of enterprises, which negatively affected the turnover of funds;
the practice of factoring operations of Russian banks has shown that it is necessary to form a reserve fund to ensure the department's obligations to customers and to cover possible losses on operations.
In the mid-90s, a new wave of commercial banks' interest in factoring operations arose. So, since July 1996, an agreement was signed between the bank " Russian loan»And 48 trade enterprises of Moscow on the transfer of receivables. In fact, Russian Credit offered its clients comprehensive service on financial support for the sale of products and settlements with consumers. The International Institute for the Unification of Private Law adopted in 1988 the Convention on International Factoring, which defined the main criteria for factoring:
lending in the form of prepayment of business claims;
maintaining the supplier's accounting records, including accounting for the sale of products, works, services;
collection of the supplier's debt;
insurance of the supplier against credit risk.
An operation is considered factoring if it meets at least two of the specified criteria. Depending on the composition of the participants in the transaction, its subject can be distinguished different kinds factoring. So, when servicing clients' debts for payments for goods, works, services, factoring participants are:
factoring department commercial bank or a specialized factoring company that arranges the transaction;
product supplier;
the buyer of the products.
Depending on the type of debt, supplier factoring and buyer's factoring are distinguished.
The subject of supplier factoring is accounts receivable for settlements with its customers. This is the most popular form of factoring. Buying debt obligations from a supplier allows him to solve the problem with a lack of funds for carrying out financial and economic activities, to rationalize the structure of his balance sheet, to reduce the risks of non-payment, and to accelerate money turnover.
The factoring of the buyer (payer) is based on accounts payable. The agreement is concluded with the paying company on the obligatory payment by the factoring subdivision on the day of the day for all or specially agreed monetary
claims to him. The meaning of this operation is that the absence accounts payable in front of suppliers contributes to the uninterrupted shipment of the necessary raw materials, fuel and other elements required for production. The debt to the factoring division of the bank arising as a result of these costs is repaid by transferring funds at the expense of the payer. It should be noted that factoring of the buyer is a more risky operation in comparison with factoring of the supplier, therefore the size of the commission charged for the operation should be higher. At this type factoring is often used progressive interest rate to pay off debts to the factoring department.
In some cases, the subject of the factoring agreement may be a debt legal entity on wages in front of workers. In essence and the mechanism of its implementation, such an operation is a kind of a simplified form of factoring of the payer.
Organization of factoring operations involves several stages:
formation of a factoring department of a commercial bank or a specialized factoring company. In the first case, the bank division must be sufficiently isolated. The bank endows it with its own funds, the value of which may subsequently increase due to profit from operations. Part own funds the factor department also includes a reserve (insurance) fund intended for emergency reimbursement of the need for funds for operations or to compensate for losses as a result of an increase in the risk of operations. In addition, the factor department raises funds from legal and individuals, loans obtained from the "native" bank or other commercial banks. When an independent factoring company is formed, the formation of resources is determined by its organizational and legal form;
the department should have a variety of specialists: economists, loan specialists, accountants, specialists in industry markets, the economy of the enterprise, as well as employees of the bank's security service;
the factor-department develops requirements for clients. In particular, when factoring a supplier, the client must meet the following criteria: his products or services, types of work must be of high quality and be in steady demand in the market; production should grow dynamically and have good prospects; he must have experienced management personnel; good organization of accounting and reporting; permanent trading partners on the basis of contracts; important is the absence of excessive accounts receivable and payable, including to the budget and banks;
are determined characteristic signs persons and types of debt, in the presence of which the factor-department refuses to work. These include: customers with low solvency and creditworthiness; clients engaged in offset or barter transactions; enterprises with a large number of small debtors or a high level of overdue receivables; clients offering as a factoring subject debentures individuals or requirements for budgetary organizations; enterprises producing highly specialized products. In all these cases, the risk of the factor department increases sharply and cannot be compensated even by an increased commission;
is being developed model contract on factoring, which stipulates the terms of the agreement with the client: type of factoring; term of the transaction; type of debt obligations as a subject of the contract; the size of the factoring fee; applicable sanctions in case of violation of the contract; terms of termination of the contract (by mutual agreement of the parties, in case of insolvency of the client, at the request of one of the parties);
- the possible forms of factoring are determined, which in the given conditions it is expedient to offer to clients.
The process of movement of credit resources during factoring is schematically shown in Fig. 16.3.
- shipment of products, implementation of works, services;
- sale of debt obligations of payers by factoring
department or company;
- obtaining a loan in the form of payment of debt obligations for
the date specified in the contract;
- repayment of a loan provided to a client through payment
obligations by payers.
In world practice, there are various forms of factoring. The most comprehensive services are in the case of a full service agreement, which is usually offered regular customers... Full service includes protection of the customer-supplier from the risk of non-payment by buyers (with a non-recourse agreement); organization of accounting for products sold and the status of receivables; ensuring the receipt of funds to the supplier through prepayment of the buyers' debt obligations. Advance payment can be made by the factoring department on the date specified in the contract or after a specified period of time, regardless of the receipt of funds from the supplier's payers. Advance payment is made for the entire amount of the presented debt obligations in rare cases, since the factor department must receive a commission. However, it is possible that the commission is transferred by the client to the account of the factor department. However, in this case, an extra stage appears in the factoring operation, which leads to a slowdown in the movement of funds and irrational cash flows... In addition, in such a case, the risk of the department increases and - in case of violation of the terms of the contract by the supplier - the problem of compensation for costs arises, including for the loan provided, taking into account interest. Due to this, the prepayment amount is set
within 80% of the value of debt obligations. The remainder of the amount of debt obligations (from 20%) is reimbursed to the client minus the commission and other expenses of the factoring department after the payment of obligations by the client's payers has been received on his accounts.
According to the degree of awareness of other persons about the contract concluded between the client and the factoring department, open and closed factoring are distinguished.
Open factoring is called factoring, the presence of which is notified to the partners of the client. In this case, they are informed that the factor-department of the bank or a factoring company with certain account details becomes the legal successor of the client. With open factoring, the client receives a loan in the amount of the amount agreed upon under the contract from the value of the debt obligations, payment for which is carried out to the address of the factoring department or company.
With closed factoring, all funds from the payers are still transferred to the client's account, which transfers them to the account of the factoring department of the bank or company with the addition of a commission. As a result of this procedure, the process of repayment of loan debt is delayed, "the factoring department needs additional resources for current operations and, in addition, the risk of non-payment increases, since claims from other persons may be brought against the client's account ( tax authorities, creditors). All this increases the cost of closed factoring.
Factoring with and without recourse can be distinguished by the level of non-payment risk. Recourse factoring assumes that the factoring department or the company has the right to return the debt purchased from him to the client if the payer refuses to pay them, regardless of the reason. Thus, this form of factoring transfers the risk of non-payment and thus the repayment of the loan to the client. In accordance with the right of recourse, the client is obliged to reimburse the factoring department for the amount paid on the sale of the promissory notes, but the commission is not returned to the client. This form of relationship is beneficial to the client only with a sufficiently high solvency of his partners.
In non-recourse factoring, the factoring department fully assumes the risk of non-payment on the part of the payers if their obligations were considered in the course of preliminary analytical work and are included in the contract. In this form of factoring, the costs of the factoring unit are not limited to the amount of previously paid debt obligations: they increase by the amount of costs to protect the interests of the unit, as well as by the amount of lost profit as a result of delays in repayment of loans.
If there is a foreign participant in the transaction (for example, foreign payers of a supplier-exporter), factoring becomes international. It should be borne in mind that in this situation for the factoring department of a bank or company, risks additionally increase - currency (unfavorable change exchange rate) and transfer (difficulties in transferring currency payments).
In the course of a factoring operation with a specific client, it is necessary to highlight the following stages:
1. Preliminary estimate the financial condition of the client and his partners. The creditworthiness of the client himself is subject to analysis (based on his balance sheets and reporting); the solvency of his debtors; quality and competitiveness of manufactured products, works, services; profitability level and profit dynamics; the size and sources of formation of the client's working capital, including their own.
Analysis of the volume and quality of debt obligations presented by the client. Its purpose is to determine the number of payers of the client and the role of each of them in the turnover of his debt; the type of debt obligations and the share that will not be taken into account in factoring operations; the presence of seasonal fluctuations in the volumes of production and sales from the client; facts of refusal to pay for debt obligations and their reasons.
Determination of lending limits depending on the conditions of the client's funds turnover, the level of risk, potential maturity of the loan, the type of factoring and other factors. The credit limit is determined primarily by the established amount of advance payment (up to 80% of the amount of debt obligations). However, the actual value of the advance payment in recourse factoring may decrease taking into account:
the amount of written out debt obligations for each payer, exceeding the limits established for him;
funds to cover obligations in connection with refusals to pay;
the amount of funds for obligations, the term of which has exceeded the repayment period specified in the agreement, etc.
Factoring fee calculation. It is made using several components, the value of each of which depends on a number of factors (see Fig. 16.4).
Factoring commission
Management fee
Accounting fee (credit)
Percentage of the customer's annual turnover
Lending interest on "short-term transactions
Additional interest - for risk and compensation for other expenses
+
Factors
Factors
Customer creditworthiness
Total risk level
Loan repayment urgency
Factoring composition (cassation, accounting, debt insurance)
Scale and structure of "production
... Buyers' solvency
Conjuncture of the banking and commodity markets
Rice. 16.4.
Conclusion of a factoring agreement, in which, in addition to the terms of the agreement, the responsibility of the client is noted for the timely provision of information to the factor department or company about the buyers' debts, their financial condition, the turnover of funds in settlements, as well as his obligation to transfer the commission within the terms specified in the agreement ... In turn, the factor department or the company undertakes to pay the transferred promissory notes and all costs associated with the transfer of funds within the contractual terms.
Notification of payers about participation in the payment turnover of the factor department of a bank or company and change of account details for payment of debt obligations (in the case of open factoring).
Information and analytical support of the contract. In accordance with the agreement, the factoring department keeps records of the client's payment transactions and periodically submits to him a report on the state of the debt, the reasons for its formation and measures to reduce it.
The parties fulfill their obligations in accordance with the contract. In case of violation of the terms of the contract, the guilty party is subject to sanctions and fines.
Thus, over time, factoring operations can firmly enter the range of services of commercial banks in Russia.
Forfaiting is a peculiar form of lending to exporters and sellers when selling goods. In terms of the implementation mechanism, it is quite close to factoring. At the same time, it is necessary to note the existing differences between these operations:
factoring is usually short-term (up to 180 days), and forfeiting is more often associated with medium-term operations (from six months to several years). However, in order to reduce the risk of the bank, it is advisable for the drawer to split his obligation into several promissory notes with shorter maturities;
in factoring, transactions are carried out mainly within the framework of the national market, although a foreign partner may also participate in the transaction. Forfaiting is always associated with servicing export-import operations;
factoring is of two types: with and without recourse. Usually banks prefer the former. When forfeiting, banks are forced to waive their right of recourse. Thus, the bank assumes all risks, relieving its clients from them;
in factoring, there is a practice according to which the bank prepays to the client up to 70-80% of the amount of the presented obligations. The remaining part of the amount minus the factoring fee is received by the client only after payment contingent liabilities payers-buyers of products, works, services. At the time of purchase of a bill of exchange, the forfaitor bank presents to the client the bill of exchange less the discount, i.e. the client immediately has relatively larger funds in his hands than with factoring;
there are differences in the types and sizes of risks. In particular, in comparison with factoring, during forfeiting additional types of risk arise such as a country (including economic and political, associated with unfavorable changes in the country of the issuer-payer - military and social conflicts, intervention, civil war, economic crisis, imperfection of legislation, etc.); transfer risk (the possibility of delay in payments as a result of a moratorium adopted by the state, legislative restrictions, the presence of a crisis of non-payments in banking system; currency risk (associated with an unfavorable change in currency parities, resulting in losses for one of the parties); risk guarantor (loss of solvency by an avalist or guarantor; to reduce this risk the bank limits the volume of guarantees from one person).
