Factoring

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About

Sell your receivable to a Factor. Under factoring a Factor purchases your receivable at a discount.

Our process

  • Book an appointment with buzzBT
  • At scheduled time our specialist will call you to understand the transaction.
  • Based on the mandate received from you, buzzBT will negotiate for the best terms from the market. 
  • Factor disburses the amount to the customer

Documents required

  • Mandate letter in favour of buzzBT
  • Details of the assignor, assignee and the type of factoring (with recourse or without recourse or on limited recourse basis.)
  • KYC and Financial details as required by the lender

Rate of interest and fees

  • ROI and fees depends upon the credit profile of assignor, assignee, type of factoring and policies of the banks / FI

Personal Details

Appointment Details

Our Business Working Hours

Monday to Saturday : 09:00 AM to 06:00 PM

Sunday : Closed

What is Factoring?

The Factoring Act, 2011 defines the ‘Factoring Business’ as “the business of acquisition of receivables of assignor by accepting assignment of such receivables or financing, whether by way of making loans or advances or in any other manner against the security interest over any receivables”.

No, credit facilities provided by banks in the ordinary course of business against security of receivables and any activity undertaken as a commission agent or otherwise for sale of agricultural produce or goods of any kind whatsoever and related activities are expressly excluded from the definition of Factoring.

Delays in settlement of dues adversely affect the recycling of funds and business operations of the business units. It is, therefore, critical to ensure that the entities are able to raise liquidity against their receivables. Factoring provides liquidity to business units against their receivables and can be an alternative source of working capital.

In recourse factoring, in the event of buyer failing to pay on maturity, the seller has to pay back the advance obtained from the factor. In non-recourse factoring the factor provides finance with a credit guarantee for buyers and will bear the bad debt risk in case if financial inability of the buyer to pay.

Advances are made as a percentage of invoice value, based on criteria such as quality of receivables, number and quality of the buyers and your requirements.

Recognizing the importance of the customer to the seller, normally banks / NBFCs extends every courtesy and consideration is given for seller's customers. Indirectly factoring helps the seller to avoid the embarrassment of having to directly seek payment from the buyers.

Generally, you need not provide any additional security.

Banks offering factoring services decide on the percentage of the invoice to be paid upfront based on their own assessment of the credit worthiness of the assignor/ buyer, due diligence carried out by them and other commercial considerations.

Yes, you can avail advances from your traditional sources of funding along with factoring services.

However, the advances are given on the debtors against whom you have not availed funding from any other financial institution. Please note that any given invoice cannot be double financed.

Automatically, when each invoice is eventually settled, buyers make payment to factors. In turn factor will pay the seller the balance after adjusting the advance, if any and outstanding charges. In some cases, banks / NBFCs allows seller to receive money on due date as its agent.

No. Factoring is not a bank loan and you are not assuming any debt.

Download our app buzzBT, book appointment with solution manager, call us, chat with us. You can also visit our website www.buzzbt.com for more information.

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