Factoring

Advantages of factoring

  • Releases circulating capital and is suitable for smoothing unbalanced cash flows that have arisen from due dates.
  • Immediate financing of invoices simplifies the cash flow planning and the collection of receipts.
  • Increases control over the buyers by improving their payment discipline.
  • Since the collateral includes financed invoice(s), the buyer’s solvency is also verified.
  • The factoring reports are available on the Internet bank and provide a convenient overview of the use of the factoring agreement and simplify accounting.

Factoring types

Domestic factoring

Suitable for a company with a constant need for cash and buyers located in Estonia.

Export factoring

Suitable for a company with a constant need for cash and buyers located outside of Estonia. The service includes the buyer’s credit risk assessment and invoice consolidation.

Invoice financing

Suitable for a small company who wants to financing of individual invoices and does not want to enter into a long-term agreement with the bank and whose buyers are located in Estonia.

Terms and conditions

  • The company has been registered in Estonia.
  • The company has a current account in Swedbank.
  • The goods should have been delivered or the service should have been provided by the moment the invoice is sent to the bank.
  • The contractual parties (buyer and seller) cannot be legally connected.
  • The invoice cannot originate from the building sector.
  • The assignment of invoices should not be forbidden and the invoices may not be pledged or assigned to third parties.
  • The seller and the buyer should not have any counterclaims that enable to clear the invoices.
  • The invoice should have a fixed due date (not subject to the resale of goods).
  • The buyer should show signs of excellent payment behaviour.

Choose the suitable factoring

 

Invoice financing

Domestic and export factoring

Amount 3,000–35,000 euros
The sales to the buyer whose invoices are financed do not exceed 50% of the seller‘s total sales.
From 35,000 euros
Buyer’s location Estonia Estonia, foreign countries
Insurance None Depending on the factoring type and the agreed terms, the buyer’s credit risk can be insured by our insurance partner.
Invoice due date Up to 90 days Up to 120 days
Agreement term Same as the invoice due date Up to 12 months
Collateral Financed invoice Financed invoice
Financing rate Up to 90% of the invoice amount Up to 90% of the invoice amount
Right to reassign the invoice The seller is responsible for the buyers’ insolvency Depends on the factoring type and the availability of insurance
Agreement fee None Based on the price list
Financing expenses 1% of the financed amount per month, or 12% per year Commission fee from the invoice + interest
Other Individual invoices may be subject to financing All invoices to be issued to a specific buyer during the agreement term are subject to financing
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Required documents

Domestic and export factoring
  • The last annual report if it has not been submitted to the Commercial Register. The submitted balance sheet and income statement cannot be older than 12 months.
  • Written orders or contracts of purchase and sale based on which the invoices are requested to be financed.
Invoice financing
  • The last annual report if it has not been submitted to the Commercial Register. The submitted balance sheet and income statement cannot be older than 12 months.
  • The invoice(s) that are requested to be financed. Upload invoices
  • Upon financing the invoice, it is required to submit an invoice that has been signed by the buyer and accompanied by a assignment note or a notification on assigning the invoice to the bank in order to assign the invoices after the agreement has been signed.