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In order to increase the efficiency of business activity and improve sales volumes, SMP Bank in cooperation with SMP Finance offers to its corporate clients recourse factoring service.
Factoring is a financial service, that enables you as a seller to receive cash advance on payable invoices by selling (assigning) them to SMP Finance.
Recourse factoring means that you (the seller) are liable for the future payment of the sold (assigned) payable invoice. In case debtor (your customer) does not pay it you have pay back received cash advance by buying it back from SMP Finance.
Factoring service enables you offer determent of payment to your customers. At the same time you simultaneously replenish your working capital by receiving immediate cash advance on payable invoices, while your customer pay the invoice to SMP Finance in the invoice due time. Factoring is an effective instrument for the growth of your business, which helps to avoid freezing of working capital accrued due to provided determent of payment.
Factoring model
1. The seller delivers goods to customer on the conditions of determent of payment.
2. The seller sells (assigns) payable invoice to SMP Finance.
3. SMP Finance provides cash advance (financing) on approved payable invoice in the amount of up to 90 % from the sum of invoice.
4. The customer pays the invoice for the delivered goods to SMP Finance in the invoice due time.
5. Final balance settlement between the seller and SMP Finance.
Factoring servicing in SMP Finance contributes to:
- increase in sales volume and receipt of the additional profit due to increase in working capital and turnover acceleration;
- structural balance improvement as far as there is no need for additional guarantees and provisions;
- growth of the company's market share: i) through offering more favourable payment terms to the customers; ii) availability of working capital that enables you to increase the range of goods at the warehouse and, therefore, increase the turnover;
- increased liquidity of accounts receivable due to simultaneous receiving of funds (cash advance) immediately after dispatch of goods delivered on conditions of determent of payment;
- liquidation of gaps in cash flows, due to opportunity of exact planning of the cash assets and redemption of internal debts.
Factoring conditions and rates (price-list)
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Agreement term
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1 year
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Agreement fee
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1% of the factoring limit (min.150,-LVL)
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Financing amount
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Up to 90% of the invoice or waybill sum
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Interest rate
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1% to 3% + 6 months index of the corresponding currency
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Maximal invoice payment term
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120 days
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Invoice management fee
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From 0,1% to 0,6% of the invoice sum (min. 1,-LVL)
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Financing currency
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LVL, EUR, USD
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Required documents:
- Factoring application,
- Company's registration documentations (Articles of association, certificates of registration, tax and VAT payer),
- Financial statements (audited annual report of the previous year, balance sheet and income statement of the current year),
- Statement regarding debt on tax payments, issued by State Revenue Service,
- Purchase/ sale agreements.
Take an advantage of the Factoring services, if you would like to avoid freezing of working capital or your customer requires determent of payment!
 Apply for the factoring services
To receive additional information or in case of any questions or uncertainties you are welcome to call: +371 67019179
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