Business finance through invoice discounting

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Invoice discounting has been for many years a popular method for business financing since it’s a cost-effective way of using a company’s unpaid receivables to generate liquidity and improve cash flow.

In Cyprus the invoice discounting market has been monopolized by the banking system through the offering of products serving the interests of the banks rather than those of traders.

Eurivex Trade Finance Limited (http://www.eurivexfinance.com/) a 100% subsidiary of Eurivex Ltd, a Cyprus Investment Firm regulated by CySEC, is offering alternative to banks’ traditional working capital funding solutions for Cyprus companies.

Who is eligible to apply?

Businesses that supply goods and services on credit up to 120 days are eligible to apply.

How to apply?

Very simple. You need to complete and send the Contact Request form available on our web site (http://www.eurivexfinance.com/contact-us/). Following a face-to-face meeting to understand your business and funding needs, we decide whether to proceed with a full assessment or not.    This process is free of charge.

How does a Company secure a funding limit?

You will need to complete and sign the Terms and Conditions Agreement and provide us with:

  • Audited financial statements
  • Management accounts
  • Debtors ageing analysis
  • Credit terms provided to your debtors

We shall evaluate your business and your debtors and give you a funding limit against which you may present your invoices and get instant liquidity.

 

In sharp contrast to the banks, Eurivex Trade Finance Limited does not require personal guarantees from the directors and shareholders of the companies seeking finance, or tangible securities in the form of mortgages and floating charges on businesses.

The financed invoice is our only collateral.  “

 

No extra collateral

In sharp contrast to the banks, Eurivex Trade Finance Limited does not require personal guarantees from the directors and shareholders of the companies seeking finance, or tangible securities in the form of mortgages and floating charges on businesses.

The financed invoice is our only collateral.

Flexible on the financials

It is important to note that Eurivex Trade Finance Limited will provide business finance based on the strength of your business and the quality of your debtors.

A company that does not have a very strong financial position, which would normally be rejected by the banks can still apply to Eurivex, if the quality of its debtors is good.

Main advantages

  1. Increase sales by giving credit to customers both in Cyprus and overseas;
  2. No extra collateral is needed, the financed invoices are the only collateral;
  3. Experienced staff who understand trade finance and factoring and are in a position to provide solutions;
  4. Secure new business as we can access markets which Cyprus banks are not servicing;
  5. Credit limits are approved through fast and flexible procedures;
  6. Fully automated systems, as clients can use our award-winning platform to upload invoices and request immediate cash;
  7. Ideal for sales ledger and debtor management including on-line access to customer reports, statement of accounts, assigning limits and more;
  8. 24/7 access by mobile or desktop
  9. Competitive and transparent pricing as hidden charges are eliminated;
  10. Credit Insurance is provided against debtor default through our association with Euler Hermes, the world’s largest credit insurance provider.

Confidential invoice discounting

Confidential Invoice Discounting Facility is a form of invoice finance that can boost a company’s cash flow by releasing funds from unpaid invoices for immediate use. The facility is confidential (as indicated by its name), meaning that debtors are not informed that such an arrangement is in place.

Do you control my entire Sales Ledger?

Yes, in Confidential Invoice Discounting you will need to assign all your invoices to Eurivex and direct all your collections from them through a special bank account monitored by Eurivex. However, your debtors will not know the arrangement.

Setting the limits

Eurivex Trade Finance Limited will do an evaluation of the business as well as the debtors. Based on the credit scoring, we will assign a funding limit for your business as well as Discounting Percentage for your invoices. In the case of applicants with very strong financials and debtor’s portfolio, the Initial Payment percentage may be as high as 90%.

How does it work?

At regular intervals agreed between Eurivex and its client, the latter uploads the key details of its credit invoices to Eurivex Trade Finance Limited, who advance cash to the business instantly. As the facility is confidential, the business conducts its own credit management and collects payment from the debtors.

Debtor payments are deposited into a bank account in the name of the client but controlled by Eurivex Trade Finance Limited. Once debtor collections are banked, Eurivex Trade Finance Limited releases to its client, the non-discounted element of the invoices minus its fees.

Debtor default

Debtor default and late payment is the responsibility of the client.

Eurivex agreement with its client stipulates the maximum credit period it commits to discount credit invoices.  Once an invoice is not settled within that maximum credit period, it becomes disapproved for funding.

The same agreement stipulates the discounting percentage for every invoice as well as the maximum monetary facility available to the client.  The latter effectively represents an overdraft facility which can be drawn on presentation of non-due credit invoices.

Let’s say we have agreed for your business an 85% Discounting Percentage and a maximum Funding limit of €30,000 and you have decided to give credit period of 30 days to your debtors.

You invoice €10,000 in the first week, submit the invoices to Eurivex and we advance to you €8,500 based on the 85% funding limit.

The second week you invoice another €10,000 and we again fund €8,500.

The third week, you invoice €10,000 and we advance €8,500.

The fourth week you invoice €10,000, but we advance to you only €4,500 because your total maximum limit is €30,000.

The fifth week, €5,000 is collected from your debtors and deposited to the dedicated bank account.  We shall pass on to you €4,750 since your non-due debtors dropped from €40,000 to €35,000 (85% of that is €29.750) and the Funding Balance dropped from €30,000 to €25,000.

The above case is a hypothetical example as there are no minimums or maximums when dealing with Eurivex Trade Finance Limited.

Charges

Eurivex Trade Finance Limited has 2 levels of charges. The Factoring fee is applied on the value of the invoices, or in other words on your sales.

The Discount charge is applied for the duration of the funding made available to you i.e. the daily balance of your Current Account (Funding Balance).

The charges depend on the financial strength of the business applying to Eurivex for the funding as well as the credit-worthiness of its debtors.

Credit Insurance

As noted previously, we cooperate with Euler Hermes to credit insure our clients or their debtors selectively on a case-by-case basis. The need to credit insure a receivable will depend on many considerations including financial strength of the client, its debtors, concentration risk as well as when dealing with overseas clients.

Local and overseas

Eurivex is an associate member of FCI (https://fci.nl/en/home) the global representative body for the Factoring & Receivables Finance Industry. With close to 400-member companies in 90 countries FCI offers a unique network for cooperation in cross-border factoring and Eurivex is in a position to open trading opportunities for Cypriot exporters.