FACTORING

FACTORING�

Factoring of Accounts Receivable is a mode of financing receivables arising out of supply of goods or delivery of services on credit. This revolving financing facility enables the suppliers/service providers to realize the maximum portion of the payment soon after the delivery is made to the buyer. In addition to financing, Factoring offers value added services like:

Sales ledger administration

Follow up and physical collection of payments

Monthly Reporting

Our Experience�

Factoring, though a relatively new concept in Bangladesh, is one of the oldest forms of commercial finance. Factoring was a well developed activity in England in the 14th century, where it evolved with the growth of the wool industry. About the same time, Factoring became a well-accepted concept in other European countries. Later on, it has also gained significant popularity in Asia and now-a-days it is one of the most commonly utilized short-term financing facilities in Sri Lanka, India, Thailand, Taiwan, etc.

IDLC, the pioneer of Factoring facility in Bangladesh, started its Factoring Operation in 1997. So far, Factoring has been receiving positive response from the suppliers, which has enabled IDLC to build up a good portfolio of factoring clients. All of our clients have experienced notable growth in their business after availing the Factoring facility.

Who can Avail FACTORING....

You are a potential Factoring client if you:

Make supply of goods/raw-materials or provide service to institutional buyers/customers on a regular basis
Have multiple institutional buyers/customers

The Mechanism�

You are a potential Factoring client if you:

Assignment of Payment:
Supplier/Client permanently assigns it's payment against delivery to IDLC.
Delivery of goods/services:
Supplier/Client makes delivery to the Buyers/Customers.
Submission of DC and Bill to Buyer:
Supplier/Client submits delivery challan & bill/invoice to Customers/Buyers.
Submission of DC and Bill to IDLC:
Supplier/Client submits the 'received copy' of delivery challan & bill/invoice to IDLC.
Disbursement:
IDLC provides a certain percentage of the submitted bill/invoice to the Supplier/Client as loan.
Collection:
Buyer/Customer makes payment directly to IDLC as per the 'assignment of payment' arrangement.
Reimbursement:
IDLC reimburses the balance amount to Supplier/Client.

Benefits from FACTORING....

Factoring

ensures Steady Flow of Funds

leads to Business Growth by ensuring more investment and providing back up for larger volume of work

provides Value Added Services like sales ledger administration and detailed reporting

helps to Save on human resource costs to render the above services

helps to procure raw material at Lower Cost through cash purchase and/or bulk procurement

offers Higher Credit Limit in accordance with real business growth

eases Other Types of Financing in future