For Corporate Clients

Factoring

 

Ֆակտորինգ, Факторинг, Factoring


Factoring is a banking instrument enabling a company to assign its receivables for delivered goods or services to the bank (for a certain fee).


By using Ameriabank’s factoring services you will have the following benefits:

 

  • Collateral-free financing of deliveries under the condition of deferred payments
  • Assurance of risks associated with buyers late payments or non-payments

Guide to factoring

Stages of factoring transaction

Ֆակտորինգ, Факторинг, Factoring

 
Domestic factoring
  • Domestic factoring enables a company or a private entrepreneur to:
  • receive the principal amount (up to 90%) of payment for delivered goods immediately
  • avoid time-consuming negotiations with the buyer regarding transfer of the amount
  • increase sales volume
  • increase the number of buyers by offering a deferred payment condition to them
  • invest the free funds into other businesses

Advantages of domestic factoring

 

  • Factoring provides an excellent opportunity to attract working capital even in case of insufficient collateral.
  • An opportunity to offer a deferred payment scheme to buyers, which will trigger an increase in the number of buyers and in market share.
  • An opportunity to considerably reduce and avoid losses caused by exchange rate volatilities.
  • Increasing liquidity through faster conversion of receivables into cash
  • An opportunity for increasing the level of goods turnover, expanding the geographic coverage and financial planning of the business
  • An opportunity for rapid recovery of production resources

 Terms

Ֆակտորինգ, Факторинг, Factoring


 

Domestic classic factoring 

Ameriabank offers a pack of factoring services, including non-recourse factoring on condition of assigning to the Bank the receivables of companies included in the list approved by the Bank. The financing is secured by the agreement executed with the partner-company. This type of financing implies the following:

 

  • Collateral-free financing of deliveries under the condition of deferred payments
  • Assurance of risks associated with buyers late payments or non-payments


 Terms



 

Ֆակտորինգ, Факторинг, Factoring


Export Factoring


Export factoring: financing where the seller of products/services and the factoring agency/bank are registered and operating in the same country whereas the buyer is a non-resident company.
 

Benefits for exporters: 

 

  • Financing of supplies prior to the final settlement with the buyer
  • Increase of financing in parallel with the growth of sales volume
  • Repayment of accounts receivable by the buyer to the bank under the arrangement of deferred payment (up to 180 days)
  • Opportunity of sharp increase of sales volume
  • Administrative management of accounts receivable
  • Mitigation of the risk of non-payment
  • Continuous availability of working capital
  • Provision of informational and analytical support to the exporter

 Terms


Ֆակտորինգ, Факторинг, Factoring



Import Factoring


Import factoring: provision of payment guarantee* for the debtor by the importing factor thus providing an opportunity of having deferred payment scheme.

Advantages for importers:

  • Deferred payment scheme (commodity credit)
  • Increasing the level of trust of foreign exporters towards RA resident importers
  • Increase of the procurement volume
  • Opportunity of avoiding payments via letters of credit

 


 * Credit cover/payment guarantee


Terms

#

Terms of factoring per currencies are specified below:

 

1

Annual interest accrued on the amount of finance (to be charged upon expiry of the agreement)

AMD

12 %: up to 60 days

12.5 %: up to 90 days

13.5 %: up to180 days 

 

USD

7 %: up to 60 days

8 %: up to 90 days

9 %: up to180 days 

 

EUR

5,5 %: up to 60 days

6,5 %: up to 90 days

7,5%: up to 180 days 

 

RUB

12 %: up to 60 days

13 %: up to 90 days

14 %: up to180 days 

 

2

Factoring service fee (lump sum fee charged out of the invoice amount at the time of disbursement of the finance)

For all currencies:

0.6%-3%

 

3

Maximum time span between provision of finance and fulfillment of liabilities under the assigned claim

Up to 180 days

(calculated starting from the date of invoice provision)

 

4

Maximum amount of finance 

 

Up to 90% of the assigned invoice

5

Type of factoring 

Recourse/Non-recourse factoring

 

 

Making a Decision on Factoring Application 

The bank makes a final decision on factoring application maximum within 10 (ten) business days upon receipt of the complete set of documents. 

In case of pledge of property, finance is disbursed to the client upon execution of the respective pledge agreements. Furthermore, in case of pledge of property, the factoring is issued to the client within 1 business day upon proper fulfillment of the following conditions precedent: (i) execution of pledge agreements in accordance with the legislation of the RA, such agreements prepared in form and substance satisfactory to the Bank, (ii) insurance of the collateral (upon the Bank’s request) by an insurance company cooperating with the Bank, (iii) fulfillment of other terms of factoring by the client. 

 

 

What may help you to get your factoring application approved

  • Sound financial position
  • Banking/credit history
  • Security
  • Management quality 
  • Business environment  
  • Business activities and credit history of the affiliated parties
 

Why your application might be rejected

  • The information (documents and other data) is not trustworthy or is incomplete.
  • The client’s declared financial flows/income are not sufficient to cover the liabilities.
  • The client has bad credit history, delinquent and/or classified liabilities (including to third parties).

 

ATTENTION! IF YOU FAIL TO REPAY THE ASSIGNED AMOUNT WHEN DUE INFORMATION ABOUT YOUR OVERDUE LIABILITIES WILL BE REPORTED TO THE CREDIT REGISTER MAXIMUM IN 3 BUSINESS DAYS.  
 
ATTENTION! IF YOU FAIL TO MEET YOUR COMMITMENTS UNDER THE AGREEMENT AND THE BANK ENFORCES THE PLEDGE TO SETTLE THEM, BUT THE VALUE OF PLEDGE APPEARS TO BE INSUFFICIENT TO COVER ALL THE COMMITMENTS ENTERED INTO BY YOU, ANY OTHER PROPERTY YOU OWN MAY BE ENFORCED TO SETTLE THE CLAIM.
 
ATTENTION! YOUR PROPERTY CAN BE FORECLOSED PURSUANT TO LAW, IF YOU FAIL TO REPAY THE CREDIT OBLIGATIONS AND INTEREST WHEN DUE.   
 
 

Secured Factoring   

Whenever required, the Creditor and the Debtor may be required to provide collateral or other means of security to mitigate the risks.

The value of the loan security is included in the estimation of the LTV ratio in an amount not more than: 

  • Real estate: up to 100% 
  • Vehicles: 50%

 While calculating the LTV ratio, the value of the finance is considered to be equal to the sum of (i) that portion of the requested finance that is above AMD 10 million, and (ii) outstanding unsecured credit obligations of the client. Furthermore, if the client’s outstanding unsecured credit obligations are above AMD 10 million, the LTV ratio is calculated only in relation to the requested amount, in full.

 

 



Updated 05.08.2020, 14:15

Services for Corporate Clients

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2 Vazgen Sargsyan Street, Yerevan 0010,RA

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