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Factoring

Cotents from Dialog Axiata Sri Lanka


What is Factoring?

 Factoring is a financial instrument which provides

  • Working Capital
  • Sales Ledger Management
  • Collection of receivables

Factoring – Why? 

  • An uninterrupted cash flow.
  • Tangible security not a requirement.
  • Factoring funds is not a loan.
  • Burden of maintaining debtor accounts and collection taken over by us.

 

Benefits to the Customer

  • Provision of management information.
  • Reminders / statements (monthly) on dues sent to debtors.
  • Maintenance of supporting documents.
  • No necessity to block his long term bank facilities.

 

Identified Factoring Markets 

General criteria to identify potential clients for Factoring:

Any business which sells an acceptable product on credit, preferably short term (up to 90 days) to a satisfactory debtor base.

  • Manufacturers of FMCG
  • Suppliers to Super Markets
  • Suppliers to Hotels
  • Manufacturers, Importers, Distributors of Pharmaceuticals.
  • Manufactures of Plastic products
  • Importers & Distributors of FMCG
  • Services Sector – e.g. Janitorial, Security, etc. 
  • Printing & Packaging Industry

 

Concentrated Main Lines of Business

  • Importers and Manufactures of FMCG

Manufactures of Spices, Vegetables, Fruits, Green Leaves, Meat Products, Jam, Cordial, Confectionery, Sanitary ware.

  • Suppliers to Super Markets

Suppliers of all the products available in the super markets

  • Suppliers to Hotels

Manufactures and Importers of all FMCG products, Suppliers of Electrical Items, Chemicals and Linen and Janitorial Services, Security Services.

  • Importers and Manufactures of Pharmaceuticals Items

Authorized Distributors of above also could be considered if the debtors are being   Supermarkets or Institutions.

  • Importers Electrical Appliances

Authorized Distributors of above also could be considered.

  • Importers and Manufactures of Plastic Products

Importers and Manufactures of Finished Plastic Products who supplies to Super Markets, Hospitals, Hotels and other Institutions.

  • Service Sector

Providers of Security, Janitorial, Transport, Courier, Cable TV, Laundry Service, Etc., who    deals with Corporate Clients, Hotels, Hospitals and reputed Institutions.

  • Advertising Printing and Packaging

Who deals with Corporate Clients, Hotels and all above business entities on a regular basis.

 

This articles is provided by Nations Trust Bank

© Dialog Axiata PLC - Sri Lanka

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Ravindra Geekiyanage  |  April 22, 2017
This is good see that financial instructions in Sri Lanka is opening to more cash flow funding products other than traditional ODs. There are several variations to the standard factoring product we are using in Australia. Those different products cater for different clients in different calibre. Different risk management strategies for each type. Happy to have a conversation with you guys as I have been in the Australian factoring industry for over last 12 years. Love to share my experience with my country men. Ravi