Factoring as an investment

Your investment in financial security

Working together with you as partners, we place special emphasis on transparent costs and conditions in line with the prevailing market rates. In addition, we tailor our products and services to your needs and to the size of your business.

The costs of factoring depend on:

  • the amount of your annual sales
  • the number of invoices you issue per year
  • the creditworthiness and structure of your debtors, as well as the days sales outstanding (DSO) figure

The costs of factoring differ depending on the business concerned. The overall benefits of factoring, however, always outweigh the costs.

 

The total costs of factoring are composed of the following:

  • Factoring fee – depending on the type and scope of the agreed services of Intermarket Bank
  • Interest – for the advance payment of accounts receivable
  • Limit fee – for granting insurance limits under a payment default insurance policy
  • Other fees – for example the e-factoring fee or fees for payment transactions
     

Example of the costs of factoring for a medium-sized company

The benefits of factoring can best be shown by the example of a medium-sized company. A trading business generates annual sales of EUR 3.5 million. Customers are granted a payment term of 15 days and a 3 % cash discount for payment within 7 days. In effect, customers only pay after 30 days on average. Due to the number of days that receivables remain outstanding (DSO), EUR 291,667 is tied up in accounts receivable. This is why the business does not have sufficient liquidity to pay suppliers promptly and deduct cash discounts.

If, however, factoring is chosen as a way of financing, increased liquidity allows businesses to make use of cash discounts when buying goods from their suppliers.

 

The following examples highlight the potential of factoring:

Annual sales
€ 3,500,000    
Cost of sales
€ 2,300,000 Cash discount % 2 %
Ø Outstanding amount €  291,667 Outstanding amount 30 days
 
Conditions of factoring
  Cash discount
€ 46,000.00
Fee
0.60 % Factoring fee
€ 21,000.00
Interest
5 % Interest
€ 11,667.00
    Other costs
€ 1,067.00
Net costs saved
    12,268.33

Factoring PLUS (example of a mid-sized company)

 

Annual sales € 20,000,000    
Cost of sales
€ 15,000,000 Cash discount % 2.50 %
Ø Outstanding amount €  2,500,000 Outstanding amount
45 days
 
Conditions of factoring
  Cash discount
€ 375,000.00
Fee 0.15 % Factoring fee
€ 30,000.00
Interest
4 % Interest
€ 80,000.00
    Interest
€ 3,540.00
Net costs saved
    261,460.00

Factoring (example of a large company)

Get detailed information on our factoring products and services  

Contact an Intermarket Bank factoring expert for a non-binding offer