Our core capabilities originate from extensive knowledge and expertise in both, international trade and global finance. We understand and pay careful attention to what needs to be accomplished on the physical level of a transaction for it to become the foundation of a successful financial investment.
Suitable receivables have to meet a set of basic requirements to qualify for financing:
- The receivable exists, i.e. it can be clearly identified and validated.
- The receivable is assignable.
- The receivable is enforceable against its debtor in the debtor’s jurisdiction.
Additionally, we apply the following considerations:
- An existing track record of successfully completed transactions between the supplier and the buyer.
- The goods in the underlying physical transaction are insured against catastrophic loss or damage.
- The receivable itself is insured through trade credit insurance against non-payment / default of the buyer.
Within the framework of supply chain finance, we focus on “Receivables Discounting” as well as “Factoring”.
Assignment and assignment of rights: a transfer of rights to an asset by means of an outright purchase for the purpose of either becoming the absolute owner, or in order to take a security interest in the asset. Assignments and their equivalent are jurisdictionally specific and, therefore, vary widely in terms of legal basis and form
Receivables Discounting is a form of Receivables Purchase, flexibly applied, in which sellers of goods and services sell individual or multiple receivables (represented by outstanding invoices) to a finance provider at a discount.
Factoring is a form of Receivables Purchase, in which sellers of goods and services sell their receivables (represented by outstanding invoices) at a discount to a finance provider (commonly known as the ‘factor’). A key differentiator of Factoring is that typically the finance provider becomes responsible for managing the debtor portfolio and collecting the payment of the underlying receivables.
Global Supply Chain Finance – Standard Definitions for Techniques of Supply Chain Finance, 2016