Factoring operations

Factoring is a financial service based on purchase of future receivables coming out of sale/purchase of goods and services.

Subjects in factoring operations:
  • Client (Seller) - Company seller of goods and services which assigns his receivables against the Debtor to the Factor
  • The Factor – ALTA banka
  • The Debtor – Company buyer of goods and services from the Client (Seller)

    By signing factoring contract, the Client sells to the Factor his receivables against the Debtor. In return the Client receives the funds at once.

    Factoring is a short-term financing instrument with various advantages:
    • Receivables collection risk is reduced;
    • Liquidity is increased since claims under invoices shall shortly become liquid funds;
    • Factoring will not increase your credit indebtedness, will not be recorded in the Credit Bureau Report, neither it will burden your balance of account.
    • By conferring receivables collection to Bank’s experts team, you will spare your time and resources.

      Factoring types:

      Factoring (with or without recourse)

      This is often used factoring operation, providing current liquidity maintenance. The factoring transaction can be agreed with or without recourse, depending on client’s and debtor’s trustworthiness. Client needs to obtain Debtor’s consent for receivables assignement to the Bank. There are two modes of the transaction’s execution:

      • As the discount purchasee and
      • As an advance (in certain percentage)


      Reverse (suppliers) factoring

      This kind of factoring is used for financing Client’s obligation to his Supplier and not under receivables purchase. In this way the Client does not get any funds from the Bank, but the Bank will pay for his obligations to his suppliers. The Client may require additional tenor in order to fulfil his obligations towards the Bank

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