Export Factoring

1. Factoring KB concludes an export factoring agreement with the supplier (exporter).
2. Supplier (Factoring KB client) provides goods to his buyer abroad including an invoice which contains assignment clause informing the buyer that respective account receivable is assigned to an Import Factor in the buyer’s country.
3. Supplier assigns the account receivable to Factoring KB; Factoring KB assigns the account receivable further to the Import Factor in buyer’s country.
4. Factoring KB pays the advance, usually in the amount of 70% to 90%, to the supplier.
5. Buyer pays the account receivable to the Import Factor’s account in the buyer’s country.
6. Import Factor remits the payment to Factoring KB account.
7. Based on the payment receipt, account receivable is settled with the supplier.

In case the account receivable is not paid within the period of 90 days after maturity due to the buyer’s insolvency, the account receivable is paid by the Import Factor (factoring company of the buyer) up to the contractually agreed limit (credit cover).

1. Factoring KB concludes an export factoring agreement with the supplier (exporter).
2. Supplier (Factoring KB client) provides goods to his buyer abroad.
3. Supplier assigns account receivable (invoice with assignment clause) with the necessary documentation to the factor.
4. Factor provides the client with advance payment and reports the account receivable to the insurance company.
5. Buyer pays the invoice amount to the factor’s account.
6. Factor pays the remaining invoice amount reduced by agreed fees and interests to the supplier.

In case the account receivable is not paid in 90 days after the due date, the factor reports an insurance event to the insurance company.

The EXPORT RECOURSE FACTORING corresponds with its domestic version.

• trading or manufacturing companies or entrepreneurs, that deliver goods or provide services to most of the countries in the world
• the deliveries are regular
• accounts receivable are before their due date
• goods are delivered on an open account credit term without securing by any bank instrument
• there is no third-party right to the accounts receivable
• there is a contractual relation between the supplier and the buyer
• annual supply volume through factoring is usually over CZK 10 million

• risk protection up to 100% of the account receivable 
• competitive advantage increase by providing goods on open credit terms from 30 up to 120 days (180 days in exceptional cases) without securing by a bank instrument such as letter of credit, banker’s guarantee, etc.
• immediate draw of funds in the account receivable currency, usually 70% to 90% of the nominal invoice value
• pre-financing (advance), usually up to 24 hours from receiving account receivable document (invoice, CMR declaration, delivery note confirmed by the buyer)
• in case the client has an account with KB, transfer of funds is possible on the same day of account receivable assignment planning specification and cash flow stabilization
• electronic communication allowing account receivable assignment and providing daily overview of accounts receivable, advances and collection
• factoring does not increase the company´s external sources – it is not a kind of a credit, it is    an advance for the account receivable
• account receivable management takeover by the Factor including collection and enforcement of debts – operating costs decrease
• interests based on actual provided funds

• Factoring fee: Includes costs charged by Import Factor or by Insurance Company for risk protection up to 100%, respectively 85% to 90% of the account receivable plus costs connected with management and collection of assigned accounts receivable. It usually amounts to 0.6% to 1.1% of the account receivable value.
• Interest: Interest is charged on advances provided for assigned accounts receivable based on short term bank credit rates level.