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.