Factoring is financing of the company’s current assets against the debts of debtors. This service is used by the wholesale and manufacturing companies to avoid freezing of current assets Factoring is an effective solution in case the seller offers to the buyer longer term payment for the sold goods.
Factoring includes three services:
- Financing of transactions.
- Administration of bills.
- Covering risks of debtors.
Nordea offers domestic (the buyer is located Latvia) and export (the buyer is located abroad) factoring.
The bank covers 90% of debtor risks with credit insurance option.
For the buyer:
- Better payment terms.
- More purchasing power, because no credit is used.
For the seller:
- Company's liquidity is improved with the help of credit that does not need additional guarantees and provision.
- Improved buyers' payment discipline.
- Facilitates planning of the cash flow.
- Rise in the sale amounts.
- No resources are spent for administration of the buyer’s debts.
- Ensures more effective money return by lowering the specific weight of the unpaid bills.
- Allows to offer the buyers longer term of payment.
- Covers buyer's solvency risks with credit insurance.
- Provides convenient information flow between Nordea Finance and seller by using the browser in the company's Netbank.
For the exporter:
- Possibility to offer better payment terms to the buyer based on the previous credit history.
- Covers possible losses that may result from not receiving the payment, delay or possible bankruptcy of the buyer.
- Consultations regarding state legislation, payment terms and other important information that is connected to the export transactions.
- Flexible credit conditions for increasing the export turnover.
Apply for the factoring service by calling the Nordea Contact Centre at 67 005 788 or sending an e-mail to email@example.com.
- Factoring period: 12 months (possibility to extend the period).
- Minimum factoring limit for one buyer: EUR 5000.
- Interest + one week BOR rate, Nordea base rate + 2–5%.
- Maximum payment term of the invoice: 90 days.
- Currency of financing: EUR, USD, GBP, SEK, DKK.
Completed application form.