Non Recourse Factoring

The product

  • Purchase, without recourse, of trade receivables against hospitals and other Public Administrations in Spain
  • Purchase price is a function of the portfolio composition (concentration by debtor and seasonality)
  • Cost varies from debtor to debtor according to their credit standing and the expected payment times
  • All risk and rewards are transferred from the supplier to IOS Finance, in line with IFRS and US GAAP standards for derecognition (“true sale”)

Tailor-made solutions

  • Tailor-made solutions depending on the objectives of the client.
  • Assignments can be made either on a revolving basis (monthly or quarterly), or ad hoc
  • This product is for companies of all sizes providing goods or services to the Spanish Public Administration and businesses who want certainty of cashflows and want to protect themselves against the risk of non-payment or serious payment delays

Benefits

  • Risk management: protection against non-payment and/or payment delays
  • Provide cash-flow certainty
  • Working capital optimization and cash flow planning
  • Positive impact on liquidity and financial ratios
  • Separating debt collection from commercial relations
  • Outsourcing the collections’ process, allowing management and operational staff to focus on their business activities

Standard process

IOS Finance follows an organized and clear process in its Non Recourse Factoring implementation
  • 1

    Portfolio Selection

    Seller and IOS Finance agree the high level composition of the portfolio
  • 2

    Pricing Indication

    IOS Finance analyses the portfolio and provides a price indication (tailor made solutions are available with regards to pricing structure)
  • 3

    Invoice Verification

    Due diligence on the portfolio, validating status of each invoice with relevant debtor. Process to take approx. 7-10 days, with no administrative costs for the seller
  • 4

    Price Re-confirmation

    Upon completion of the due diligence, IOS Finance to reconfirm price and perimeter of the portfolio
  • 5

    Assignment Agreement

    Assignment agreement executed before a notary and duly notified to relevant debtors. Transfer compliant to IFRS and US GAAP standards (“true sale”)
  • 6

    Payment

    Payment of the purchase price agreed in the Assignment Agreement
  • 7

    Credit Management

    IOS Finance to manage servicing, collection and recovery of the receivables. Seller can continue to monitor the performance of the transferred receivabes