Factoring Factoring

"I need quick access to cash in order to finance the growth of my business."

Do you want to expand your business, but the cash needed to achieve this is tied up in outstanding invoices? Do you want to strengthen your competitive position and offer longer payment terms to customers, without hurting your company’s liquidity and balance sheet?

Factoring is the best solution to improve your company’s liquidity and provide financing of your ongoing operations without having to raise any loans.

What is factoring?

Factoring is a transaction in which a business sells its accounts receivable (invoices) to a factoring company, also known as a factor. In exchange, the factor immediately advances cash to the business. Factoring is a comprehensive financial service available to companies of all sizes. In addition to providing instant access to cash, factoring combines credit risk protection, accounts receivables bookkeeping and collection services.

Why use factoring?

Factoring improves your company’s liquidity by providing instant access to cash tied up in unpaid invoices.
Factoring saves time and reduces expenses of managing your company’s receivables. The factoring company will handle managing and collecting payments from customers. The time and effort spent on these time consuming activities can be redirected to the company’s core business.
Factoring protects your company from bad debt. Factor takes on the risk of non-payment by your customers.
Factoring is an easily accessible form of financing. Unlike conventional bank loans, factoring does not require collateral. Also, factoring requires fewer procedures and allows faster advancement of funds to the company.
Factoring is not a loan, therefore it does not add to the liabilities on your company’s balance sheet (non-recourse factoring).
Factoring allows your company to be more competitive. You are able to offer longer payment terms to customers without hurting your company’s liquidity.

Factoring with KUKE Finance

In March 2014 we have set up a factoring company called KUKE Finance JSC. The aim of the company is to provide export and domestic factoring services in all available forms, particularly within the framework of non-recourse factoring i.e. where the factor assumes the risk of non-payment by his client’s buyer. More information about KUKE Finance is available on the company's website www.kuke-finance.pl.

We have prepared a special solution that combines factoring with credit insurance for companies that have already concluded a credit insurance agreement with KUKE or plan to do so in the near future. Your business will benefit from a comprehensive accounts receivable management that includes financing, administration, monitoring and debt recovery, as well as protection against the risk of buyer’s default. For more information please go to www.kuke-finance.pl/factoring-kuke-insurance.

How does it work?

Step 1: Sale of goods or services and issue of invoice
The company (factoree) delivers goods or renders a service for the buyer. Next, the company issues an invoice with a deferred payment term and provides KUKE Finance (factor) with the relevant information about the invoice via an online system.

Step 2: Cash disbursement and monitoring of receivables
KUKE Finance disburses an advance payment to the company of 90% of the gross value of the invoice as soon as the receivables are entered into the accounts. No operating fee is charged by KUKE Finance at this stage. The amount receivable is monitored by KUKE Finance until it is fully paid off by the buyer.

Step 3: Payment by the buyer and settlement of receivables
The buyer completes the payment to KUKE Finance, which in turn transfers the outstanding portion of the receivables to the client.

Step 4: Charging of factoring costs
KUKE Finance does not deduct any costs relating to the service from the Client’s factoring account. All factoring fees are charged under a separately issued invoice with a 14-day payment term.