Factoring

Flexible financing for your accounts receivable

Factoring enables you to benefit from your customers’ good credit standing and to secure liquidity inexpensively. Your company sells the accounts receivable to PostFinance on a regular basis via an automated process, and receives liquidity either the same day or within three days. PostFinance also assumes the default risk.

Factoring: flexible and inexpensive liquidity with default protection.

  • Flexible generation of additional liquidity from your accounts receivable

  • The opportunity to improve your balance sheet figures by reducing your accounts receivable

  • PostFinance assumes the risk of default on your accounts receivable

  • Attractive financing terms

  • Silent Factoring (i.e. the debtors are not notified) is an option, and you can still make use of dunning (in-house Factoring)

  • Straightforward processing with an automated online solution

    • Your company sends invoices to the debtors as usual
    • Via a file created automatically from your accounts, you send PostFinance the outstanding accounts receivable data on a regular basis
    • PostFinance buys these accounts receivable and pays the invoice amount, minus a retention of 5 to 10% and plus interest, to your company
    • Once the debtor has made payment, the retention is paid out to your company
    • If your company already has a credit insurance policy, then you can use this for Factoring
    This illustration shows how factoring works. 1. Your company delivers the goods/provides the service and sends the invoice to the debtors. 2. Your company sends the invoice information to PostFinance. 3. PostFinance pays the invoice (e.g. after one day) to your company. 4. The debtors pay the invoice amount to PostFinance when due (e.g. after 30 days).
  • Attractive interest rates from 1.5% a year including hedging costs (depending on the credit standing of the debtors as well as other factors).

    Key requirement for Factoring

    • The accounts receivable are accrued on a regular basis, are freely transferable, have not already been assigned, and can be insured for the required amount
    • The accounts receivable amount to a financing volume of at least CHF 500,000 (roughly equates to sales of CHF 5 million a year) 
  • Assumptions

    • Accounts receivable of CHF 12 million a year
    • Payment after one day instead of 30 days

    Results

    • CHF 1 million of additional liquidity
    • CHF 20,000 in costs with 2% interest