The "Business Finance" facility provided by Unibank finances up to 90% of internal debtor and creditor liabilities. The factoring and the "Sales Finance" extended to business operators through the "Trade Finance" facility envisage the bank rather than the buyer settling suppliers’ debts.
Factoring
Factoring is a service letting business owners obtain from the bank the finances for the products purchased. An incorporated business or an unincorporated enterpriser receive the funds from the bank in exchange for the cessation of the money claims to their buyers. This is the sequence in which the factoring works:
— The seller sends the goods to the buyer on deferred payment terms;
— The seller submits to the bank the documents confirming the despatch of the goods;
— The bank notifies the buyer and pays the seller 90% of the goods’ value;
— The buyer pays the bank upon expiry of the deferred period (up to 60 days).
This product has advantages for both the buyer and the seller.
The seller receives the funds from the bank and is capable of continuing its business without having to wait for the buyer to pay up. Since the bank pays the seller 90% of the value of the goods, the supplier is safeguarded against the FX, liquidity and inflation risks.
The buyer who does not give any security enjoys a deferred payment period (because the bank pays for the goods) and spends its funds on other business development ends.
Sales Finance
The sales finance is a product that enables the bank to finance money claims and invoices of the buyer. The bank honours the liability of the owner (buyer) to the supplier (seller). The buyer then pays the bank within a specified period.
The "Sales Finance" credit product offers advantages for both the buyer and the seller, namely:
The seller:
— Can receive the money without waiting for the buyer to pay up;
— Is safeguarded from FX change impacts on a debit liability and enjoys lower liquidity and inflation risks;
— Can accelerate turnovers and plan cash flows.
The buyer:
— Apart from the deferred payment period, can buy more without experiencing extra risks and expenses.
