Factoring as a modern method of financing an enterprise. Factoring and its role in sources of financing the activities of an organization 2 factoring as a way of financing the activities of an organization

In most industries, factoring can be used as a source of financing for an enterprise. After all, for suppliers it is a way to get rid of the lack of working capital and cash gaps, and for buyers it is an opportunity to defer payment for the required time.

Most often, a commercial loan, better known as deferred payment, is used as the main source of financing for an enterprise. But when providing such a loan, many suppliers face a lack of working capital and cash gaps. For buyers, the main problem is the inability to defer payment for the time they need. Here you can consider factoring as a source of financing the activities of an enterprise.

The classic product provides for financing the supplier against the assignment of claims to the buyer for the delivery of goods (works, services) with deferred payment. The main goal for the supplier in this case is to obtain financing in order to be able to provide commercial credit to its customers. If the buyer is interested in receiving a deferment from the seller, he can use a reverse service called purchasing (reverse) factoring.

The interaction between the parties when using purchasing factoring consists of several stages.

A tripartite agreement is concluded between the factor, the seller and the buyer.
The supplier ships the goods (or provides services) to the buyer in accordance with the supply agreement.
The assignment by the supplier of the rights of monetary claims to the factor and the transfer to him of shipping documents confirming the fact of delivery or provision of services.
The factor pays the supplier financing in the amount of 100 percent of the delivery amount.
Upon expiration of the period specified in the contract, the buyer pays the factor the full cost of the goods (work, services).

Factoring and its financial features

Under a purchasing factoring agreement, the supplier receives 100% financing (with classic factoring, financing does not exceed 90%) without recourse, that is, if the buyer fails to pay, the factor cannot make a claim against the supplier. This factoring scheme provides protection against the risk of non-payments; they remain with the factor. Suppliers working with this counterparty can join the work under a purchasing factoring agreement using a simplified scheme.

If the supplier does not need to replenish working capital immediately after delivery, he can use a payment guarantee from the factor. The funds will be paid exactly on the day the deferment ends, which will allow the company not to disrupt its financial cycle and, at the same time, not overpay for attracted financing.

The most important advantage of reverse factoring for the buyer is the opportunity to receive a deferred payment from the factor beyond that provided by the supplier. Another plus is that a tripartite agreement allows you to share costs with him in any convenient proportion, depending on who is more interested in receiving factoring services.

How to calculate the cost of factoring services

Payment for factoring services can be distributed between the supplier and the buyer, for example, according to the following principle: the commission for the first 60 days of deferment is paid by the supplier, and for the subsequent period - by the buyer. This opportunity is all the more relevant since factoring services are by no means cheap.

The cost of factoring services includes several types of commissions:

for processing documents confirming the fact of delivery or provision of services. This is usually a fixed amount;
for the administrative management of receivables. Charged as a percentage of the amount of claims assigned;
for providing funds as part of factoring services. Calculated as a percentage of the amount of funding provided for each day the funds are used;
for providing an additional deferred payment. Paid by the buyer in the amount of interest on the amount of the current debt on the assigned monetary claim for each additional day of deferment.

The cost of factoring services is also influenced by the individual parameters of the transaction, such as the period of use of the additional deferment by the buyer, the volume of monthly repaid debt, and the financial condition of the organization. For large and reliable companies that act as buyers in a reverse factoring transaction, the conditions will be more favorable than for small supplier companies in recourse factoring. The range of rates for reverse factoring on the Russian market is quite wide and today ranges from 18 to 24 percent per annum, which is noticeably higher than for loans.

The efficiency of factoring in an enterprise

To assess the effectiveness of reverse factoring, calculate the cost of covering cash gaps and the cost of deferred payment from suppliers. Determine the optimal deferred payment period and compare it with the current one. It is better to work out a reverse factoring scheme with the main supplier, and then offer it to other counterparties.

The factoring mechanism as a method of financing Russian enterprises is not available to everyone; factoring companies impose a number of requirements on the financial position and solvency of counterparties. When concluding a reverse factoring transaction, special attention is paid to the analysis of the financial and economic activities of the buyer. To determine financial stability and solvency, standard credit analysis methods are used. Such indicators as revenue volume and financial results are considered. In addition, a number of specific parameters are analyzed, for example, the liquidity of the purchased products, the buyer’s relationship with suppliers, the duration and quality of their cooperation.

Before concluding a transaction, the factor must also make sure of the reliability of the supplier, since there are situations when delivery requirements are transferred back to him, for example, when the buyer returns a low-quality product.

The scope of application of purchasing factoring includes almost any industry. This product is used, in particular, by retail chains, which thus provide themselves with maximum delay. For manufacturing companies, purchasing financial factoring allows them to obtain a commercial loan from their suppliers, cover the resulting cash gap and pay off their obligations on time. In a number of industries, the use of this financing instrument can allow a company to gain competitive advantages.

Factoring in the practice of Russian enterprises

Personal experience
Alexey Zholob,

Director of the company Trading House "Nautilus"
In the fishing business, which we have been doing for many years, the use of reverse factoring has an interesting effect. Many people know that some types of fish are caught only once a year, and in order to ensure maximum profitability of sales, you need to purchase a one-time volume of products that would be enough for sale throughout the year. Previously, only large companies with access to long-term financing could afford this. Purchasing factoring makes it possible to compete with them. Using it, we increased our sales by 20 percent. We can afford to sell our products at maximum profit by choosing the moment when there is a favorable situation on the market. In addition, we freed up funds, which we used to open a network of retail outlets.

Mikhail Khoroshev,

Deputy Financial Director of the RONIKON cabinet factory

Purchasing factoring is one of the tools for financing the current activities of our company. Consideration of the application by the factor took about a month and a half; the process itself was similar to a regular loan application from any bank, so it did not cause any particular difficulties. A certain problem was the coordination of the scheme of work with suppliers - largely due to changes in calculations, since payment came from the factor and the need for mutual offsets arose. The document flow also had to be coordinated separately - despite the development of digital technologies, the provision of originals confirming the delivery of documents was a mandatory requirement of the factor. It is worth noting that the cost of factoring is high relative to other sources of financing, so the feasibility of its use is determined in each specific case.
The use of purchasing factoring made it possible to manage receivables more flexibly, quickly increase actual deferred payments and not burden the company's assets with additional collateral. Proper use of this tool can also bring benefits to the company, for example, if a supplier is ready to provide a discount when switching from deferred payment to payment terms upon shipment, then the company’s savings on this discount may exceed its costs for factoring - in this case, the factor pays With the supplier immediately after delivery, you receive a discount, and for the delay you pay the factor.

Factoring is one of the sources of financing the operating activities of an enterprise.

Factoring is a long-term agreement under which an intermediary (factor) acquires the accounts receivable of an enterprise, assumes the risk of non-payment on any of the accounts and is responsible for ensuring that money is received for payment.

The factor also conducts a credit check on all clients. The factoring company buys from the supplier company its payment documents for the amount S and thereby assumes the obligation to recover the entire amount from the buyer, taking into account late fees. A typical scheme of factoring operations is shown in Fig. 13.8.

Fig, 13.8. Factoring process:

1 - delivery of goods on credit; 2 - the agent issues an invoice to the buyer; 3 - payment of an advance payment (up to 80% of the principal amount); 4 - the buyer returns the money to the agent; 5 - payment to the company of the remaining 20% minus commission to the factor and interest on the loan

The differences between factoring and credit are listed in table. 13.6.

Differences between factoring and credit

Table 13.6

Factoring	Credit
The supplier does not transfer a certain amount to fulfill its obligations, but transfers a certain right (right of claim)	The debtor transfers a certain amount to the creditor to fulfill his obligations
Factor income - discount between the amount issued to the supplier and the amount received from the debtor	Lender's income - periodic payments as a percentage of the loan amount
The amount of money transferred to the supplier is returned by the debtor - a third party	The debt is returned by the person who received the loan, although the possibility of fulfillment of obligations by a third party is not excluded

where 5 is the amount paid by the factoring company

to the client; r - interest rate for operations of similar risk; T is the duration of the factoring agreement.

There are two forms of factoring. According to the first of them - traditional factoring - the factor performs the function of lending money, making advance payments even before the receipt of money from debtors. The factor typically pays 70-90% of the invoice amount upfront and charges interest at a rate that is 1-1.5% higher than for conventional borrowers. The remaining amount acts as an insurance fund and is paid if the consumer enterprise pays the payment documents in full, thereby insuring the risk of consumer refusal to accept or bankruptcy. The amount of the advance depends on the degree of dilution of accounts receivable due to the presence of doubtful debts, slow turnover, etc. The share of the insurance fund can be determined as the standard deviation of the data obtained using the following formula:

where S3 is the amount spent by the bank on the acquisition of receivables; Sn is the amount received by the factor after the end of the factoring agreement.

In the second form - term factoring - the factor does not lend money. The enterprise and the factor agree on the limits of the loan and establish a periodically updated average period for the factor to receive money from all debtors. The factor pays the company amounts based on the agreed period, regardless of whether the client has paid the factor or not. For example, at the end of a normal 30-day period, the debtor paid only RUB 5 million. on an account for a total amount of 10 million rubles. The factor transfers the entire amount of the invoice to the enterprise, and charges interest on the remaining amount of the debt. This type of factoring allows you to insure against doubtful debts.

Thanks to the use of factoring, an enterprise can:

Accelerate the turnover of working capital and thereby reduce the need for financing;

Limit the amount of expenses associated with servicing loans, collecting accounts receivable and accounting for them;

Protect yourself from doubtful debtors.

The main advantages of factoring are listed in

table 13.7.

Advantages of factoring

Table 13.7

Provider	Buyer	Factoring company
Increasing sales volume	Obtaining a trade loan (deferred payment)	Income growth due to interest on loans, payment of commission services, interest on turnover for risk
Increase in the number of buyers	Eliminate the risk of purchasing low quality goods
Security competitive properties	Expansion of procurement	Strengthening relationships with counterparties
Possibility of providing customers with preferential terms of payment for goods	Strengthening market positions	Strengthening market positions
Acceleration of working capital turnover	Better use of working capital	Expanding the range of services for clients
Strengthening the financial position		Increase in the number of clients
Strengthening the financial position		Diversification

The main component of the effect of factoring is the receipt of money immediately after shipment of products, and these funds are the enterprise’s own funds, and not borrowed.

Issues for discussion

1. What is the difference between different types of working capital management policies? At what stages of the life cycle can one or another type of working capital management policy be used?

2. What factors influence the company's need for working capital? How can the influence of these factors be taken into account when managing working capital?

3. What cash flows arise when providing discounts to companies? How can you calculate the feasibility of providing discounts?

4. What tools can be used to manage accounts receivable? I I

Factoring is a financial service system, commission and intermediary services provided by the client's factoring company related to working capital lending.

The purpose of factoring is to accelerate the turnover of working capital and strengthen payment discipline in the economy.

There are 3 parties involved in factoring operations:

1. Intermediary factor (bank or specialized factoring company);

2. Supplier;

3. Buyer.

Historically, conventional factoring was the first to emerge, which is a universal system of financial services for clients, including accounting, settlements with suppliers and customers, and insurance lending. The client retains only the production function.

Enterprises with this form of factoring may refuse to retain their own staff of employees performing functions assumed by the factoring organizer. This helps reduce production costs, but there is a risk of complete dependence of the client on the factoring company.

Along with conventional (broad) factoring, there is confidential factoring, which is limited to performing only certain operations - assignment of the right to receive money, payment of debts, etc.

Confidential factoring is a form of providing the supplier - factoring client with a loan for goods shipped, and the buyer with a payment loan.

Currently, the intermediary factor provides the following services to clients:

1. Acquire from supplier enterprises the right to receive payment for commodity transactions from one or a group of buyers in agreement with the seller.

The essence of this operation: the bank pays the supplier the cost of sold products immediately, and then receives money from buyers, i.e. provides insurance lending.

2. Purchasing from companies that supply accounts receivable for goods shipped and not paid for on time by customers.

Conditions: delay in payment for no more than 3 months and upon notification from the payer’s bank that the payer has not been declared insolvent.

3. Purchase bills from your clients with immediate payment (early repayment).

Commission remuneration:

Discount = Amount of bill – Amount of payment on the bill.

The main purpose of factoring services is to finance the client’s working capital (80% - 90%).

For its services, the intermediary factor charges a certain fee, which includes:

Commission remuneration;

Interest on a factoring loan, which is charged from the date the loan is granted until the date of receipt of funds for shipped products from the buyer.

Credit risks.

Credit risk– the risk of failure by the debtor to fulfill its obligations to the supplier of goods and services, i.e. risk of debtor default.

Credit risk is the risk of losses associated with the deterioration of the condition of the debtor, counterparty to the transaction, or issuer of securities.

The deterioration of the condition (rating) is understood as both a deterioration in the financial condition of the debtor and a deterioration in business reputation, position among competitors in the region, in the industry, a decrease in the ability to successfully complete a specific project, etc., i.e. all factors that can affect the debtor's solvency.

Losses in each specific case can be:

Direct – non-repayment of the loan, non-delivery of funds;

Indirect – a decrease in the value of the issuer’s securities, the need to increase the volume of loan reserves.

The procedures for assessing credit risks are based on the following concepts:

1. Probability of default – the probability with which the debtor may find himself in a state of insolvency over a certain period of time.

3. Amount exposed to credit risk – the total volume of obligations of the debtor, counterparty to the organization, the amount of investments in the issuer’s securities, etc.

4. Loss in case of default - the proportion of the amount exposed to credit risk that could be lost in the event of default.

Credit risk assessment can be carried out from 2 positions: assessment of the credit risk of an individual operation and a portfolio of operations.

A basic assessment of the credit risk of an individual transaction can be carried out at different levels of detail:

Estimation of the amount at risk;

Assessment of the probability of default;

Assessment of expected and unexpected losses.

With the classical approach to credit risk management, expected losses are covered using the reserves that are formed, and unexpected losses on credit risks should be covered using the organization’s own funds (capital).

Credit risk management methods:

1. Formation of reserves (RK);

2. Credit risk in trade operations on deferred payment terms can be eliminated using factoring (see question No. 6).

3. Credit risk insurance in an insurance company.

The object of insurance is the property interests of the insured, associated with the possibility of losses as a result of failure to fulfill contractual obligations by the counterparty (debtor of the insured).

An insured event for trade credit insurance is the occurrence of losses for the policyholder as a result of the insolvency (bankruptcy) of the debtor; failure to fulfill obligations due to force majeure; long delay in payment on the part of the counterparty (debtor).

Questions for self-control:

1. Credit functions, their characteristics. Forms and types of credit?

2. Bank loan, its characteristics. Principles of bank lending?

3. Commercial loan, its features?

4. Leasing as a long-term financing tool?

5. What are the main methods of lending to legal entities?

6. What is the essence of an open credit line: revolving, non-revolving?

7. What documents are submitted to the bank when a legal entity receives a loan?

8. What basic conditions must be provided for in the loan agreement?

9. The main forms of ensuring loan repayment? What are the basic requirements for collateral of property?

10. Tell us what rights the mortgagor has to own, use and dispose of property without transferring it to the mortgagee.

11. How should a loan be repaid by a legal entity (frequency, order)?

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One of the methods of financing entrepreneurial activity is factoring operations - a type of trade and commission operation. Factoring– assignment to a bank or specialized factoring company of unpaid debt claims (receivables) arising between counterparties in the process of selling goods and services on commercial credit terms, in combination with elements of accounting, information, sales, insurance, legal and other services of the supplier company.

There are three parties involved in factoring operations:

– factoring company or bank factoring department- a specialized institution that purchases requirements from its clients for their customers. In fact, the purchase of receivables and financing of client firms occurs;

– client company(supplier of goods, creditor) – a company entering into an agreement with a factoring company;

– borrowing company- buyer of goods.

Factoring operations help speed up settlements, save the company's working capital, and also accelerate the turnover of the company's working capital. Factoring services are most effective for small and medium-sized companies that traditionally experience financial difficulties due to late repayment of receivables and are limited in obtaining a bank loan. Thus, factoring services provide the following advantages for the supplier company:

– the possibility of financing using the funds of a factoring company before the payment deadline;

– reducing the financial risk of the company;

– the possibility of obtaining from the factoring company information about the solvency of buyers – clients of the company.

However, not all business firms are subject to factoring services. Thus, factoring companies, as a rule, do not accept the following services:

– companies with a large number of debtors, the debt of each of them is expressed in a small amount;

– firms engaged in the production of non-standard or highly specialized products;

– companies working with subcontractors;

– companies selling their products on after-sales service terms;

– firms that enter into long-term contracts with their clients and issue invoices upon completion of certain stages of work or before deliveries are made.

Factoring operations are also not carried out on debt obligations of branches or divisions of business firms.

There are several main types of factoring operations, classifying them based on various characteristics. Factoring operations can be domestic and international. In the event that the supplier company and its client, i.e. the parties to the purchase and sale agreement, as well as the factoring company, are located in the territory of one country - this is interior factoring. If the participants in the factoring agreement are located in different countries, this international factoring.

In an international factoring transaction, a distinction is made between direct and indirect factoring. Feature direct factoring is the presence of only one factor fulfilling obligations to the exporting supplier, as well as the fact that the factoring company itself makes a demand for payment of the delivered goods to the importer. In direct factoring there are: direct import factoring and direct export factoring.

At direct import In factoring, the supplier company assigns the right of claim to a factor located in the importer’s country. This type of factoring only makes sense when exports are made to one or two countries. If the exporter supplies goods to a larger number of countries, then it is more convenient to enter into one agreement with a factoring company in his own country than several direct agreements with factoring companies in other countries. Direct import factoring can be used by companies that do not need urgent financing for assigned claims.

Direct export factoring is that the supplier assigns the right of claim to a factoring company located in the same country as the supplier.

Indirect factoring allows a factoring company located in the country of the exporting supplier to enter into a subfactoring agreement with a factoring company located in the country of the debtor-importer, thus, the debtor pays the amount of debt to the factor company located in the country of its activity, and that, in turn, pays a factoring company located in the supplier's country. However, a subfactoring agreement is concluded in cases where such a transfer is not prohibited by the factoring agreement.

There are open and hidden factoring operations. Open– if the debtor is notified that the claim has been sold to a factoring company. At hidden (quiet) In factoring, the client enters into an agreement with the factoring company without notifying his customers about it. This classification feature is the main one, since in this case the organization of the factoring operation depends on the type of agreement. The fundamental difference is who the purchasing firm ultimately pays the bills to. With open factoring, payment is made directly to the factoring company, and with silent factoring, payment is made to the supplier company, since the buyer is not notified of the participation of the factoring company.

A type of open factoring is semi-open factoring. In this case, the supplier does not inform the debtor in advance about the conclusion of a factoring agreement, but when it issues invoices to him, he is obliged to indicate both the agreement concluded with the factor and the number of his account to which the payment will be sent.

In addition, the factoring agreement can be with or without recourse. Availability rights of recourse provides for the possibility of a return claim to the supplier company to reimburse the amount paid if the buyer refuses to fulfill its obligations, i.e. in this case, the credit risk is borne by the supplier company. If a factoring agreement is concluded without recourse, then in this case, along with the sale of monetary claims to the factoring company, credit risk is also transferred.

When entering into an agreement with recourse rights, the supplier company continues to bear some credit risk on the debt claims sold to the factoring company. This condition is usually provided if the supplier is confident that he cannot have doubtful debt obligations, or due to the fact that they carefully assess the creditworthiness of their customers-buyers, so the supplier company does not consider it advisable to pay for credit insurance services. risk.

Factoring agreements can be concluded with the provision of credit to the supplier in the form of advance payment or payment of claims by a certain date. If there is a condition for prepayment up to 80% of the claims assigned by the supplier company are paid in the form of an advance payment, the remainder is paid by the factoring company after receipt of funds from the payer. At payment of claims for a certain date, the amount of assigned debt claims (minus costs) is transferred to the supplier company on a certain date or after a certain time.

An agreement on factoring services is concluded between the supplier company and the factoring company, usually for a period of 1 to 4 years, and its validity can be terminated for the following reasons:

– mutual consent of the parties;

– desire of the factoring company;

– desire of the supplier;

– insolvency of the supplier.

Under the first two conditions, the supplier must find some other source of funds and buy back the claims assigned to the factor firm. In turn, the factoring company informs payers that from this moment all payments are made in favor of the supplier.

The factoring agreement must stipulate the rights and obligations of each party; procedures for granting loans to suppliers, assignment of debt claims and their collection; the procedure for implementing mutual demands; limits on the amounts within which credit risks are insured.

The contract should also specify the fee to be charged to the supplier. In international factoring practice, there are two ways for a factoring company to generate income: in the form of a discount and in the form of remuneration for services rendered.

The first method is used if the factoring company finances the supplier. In this case, the discount is defined as the difference between the value of the assigned claim and the amount paid to the supplier. This difference increases or decreases depending on the following conditions:

– the period between the date of payment by the factor firm to the supplier and the date of receipt of payment from the debtor;

– reliability of the supplier;

– additional obligations fulfilled by the factoring company to the supplier.

If the factoring agreement stipulates the services that the factor firm provides to the supplier, then they must be remunerated. The amount of remuneration depends on the amount of work performed by the factoring company and is calculated as a percentage of the supplier’s annual turnover. Its specific value depends on the degree of credit risk, the creditworthiness of buyers, the scale and structure of the supplier’s production activities. The amount of remuneration, as a rule, ranges from 0.5-3% of the amount of transferred accounts. If there is recourse, a discount of 0.2-0.5% is usually made.

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