How does it work?
Receivables finance programmes are based on the sale of some or all receivables to a funder or SPV, governed by the terms set in the Receivables Purchase Agreement (RPA). The amount of funding is based on an agreed advance rate, which is in turn based on the total balance of eligible receivables and debtors in the portfolio.
The sale of receivables, and associated rights, can be structured with or without recourse to the company, and collections from underlying debtors can continue to be made either to the company’s accounts or directly to the vehicle or funder, depending on the agreed structure.
Improve cash collection and reduce DSO
Access alternative source of funding
Improve liquidity position
Potential for reducing leverage
Not involved in cash collection