What is Factoring?
Factoring is a financial product where a company sells its invoices (receivables) at a discount to a third party, known as a factor. The factor then collects payment on those invoices from the company's clients. This process is also known as "receivables financing."
Why Use Factoring?
- Reduce administrative costs
- Improve cash flow
Factoring Services
FACTORING WITH GUARANTEES (With Recourse)
- In factoring with guarantees, the supplier (our client) assumes the risk if their customer fails to pay the invoice. This includes risks related to the customer's insolvency.
- The supplier guarantees the existence, validity, and collectability of the receivables sold to the factor.
- Both the supplier and their customer are responsible to the factor for the payment of the receivables, according to the terms set in the contract.
FACTORING WITHOUT GUARANTEES (Without Recourse)
- In factoring without guarantees, the factor assumes the risk of non-payment from the buyer, including risks related to insolvency.
- The supplier is not responsible to the factor if the buyer fails to pay the receivable.
- However, the supplier remains fully responsible for the validity of the receivable and guarantees that it is free of any disputes, liens, or other claims.
LOCAL
Local factoring applies to the sale or transfer of receivables from transactions between entities that are legally registered and operating within Albania. This includes both companies and registered business individuals residing in Albania.
INTERNATIONAL
International factoring applies to the sale or transfer of receivables from transactions where at least one party (either the seller or the buyer) does not have a head office or residence in Albania.
The Factoring Process
- You issue an invoice to your customer for goods or services.
- You submit a copy of the invoice to us (the Factor).
- We advance you a percentage of the invoice's value, minus our fees.
- We collect the full payment from your customer on the due date.
- Once payment is received, we pay you the remaining balance.
Benefits for Your Business
- Competitive interest rates
- Fast and simple procedures
- Improves eligibility for new business opportunities
- Scalable funding that grows with your business
- Provides the opportunity to work with new suppliers
Our Pricing Structure
|
Disbursement Commission per Invoice |
1% |
|
Prepayment Rate |
Up to 90% |
|
Prepayment Rates: |
|
|
Monthly Interest Rate |
1.50% |
|
Penalty Fee (Up to 10 days late) |
0.00% |
|
Penalty Fee (Over 10 days late) |
1.5% - 2.5% |
|
Other Service Costs: |
|
|
Factoring Application Review Fee |
0,25% |
|
Annual Maintenance Fee |
5,000 lek |
|
Contract Documentation |
Free of charge |
|
Financing Limit Increase / Change Fee |
Free of charge |
|
Per-Invoice Processing Fee |
200 ALL / invoice |
Factoring in Action: An Example
A client has an invoice for 100,000 ALL with a 30-day maturity. After applying, the client receives the following terms: a 1.5% monthly interest rate, a 1% administration commission, and a 90% prepayment rate.
- The Factor immediately advances 90,000 ALL (90% of the invoice) to the client's account.
- After 30 days, the debtor pays the full 100,000 ALL to the Factor.
- The Factor calculates its fees (1.5% interest + 1% commission = 2.5%), which total 2,500 ALL.
- The Factor then pays the remaining balance of 7,500 ALL (the 10,000 ALL held back, minus the 2,500 ALL in fees) to the client.