Making optimum use of your working capital together
Generate valuable liquidity from one-off or recurring receivables
The sale of individual receivables or an entire portfolio of receivables, or their securitisation, against liquidity offers you a flexible alternative to short and medium-term financing. And optimises your use of balance sheet resources.
Short-term liquidity from smaller stocks of receivables.
Longer-term liquidity from larger portfolios of receivables.
Liquidity from international export receivables.
With factoring you continuously sell your open receivables from goods deliveries and/or services. You receive the equivalent value of your receivables immediately as additional liquidity.
The securitisation of receivables is a permanent and cost-effective form of financing. The spectrum of receivables and debtors that can be purchased is very broad. Long receivables periods are also possible.
With our forfaiting solutions you generate liquidity from international export receivables. This enables you to operate on the world markets with efficiently allocated capital and risk.
Immediate liquidity from your receivables portfolio
In factoring, you sell your outstanding receivables from goods deliveries and/or services. You receive the equivalent value of your receivables immediately as additional liquidity. You use this liquidity to pay your suppliers, in particular to realise the cash discount income.
Together with our subsidiary VR Factoring GmbH we offer you financing solutions tailored to your needs.
Why does factoring pay off?
Factoring offers you additional and plannable liquidity that grows with your turnover. At the same time, you are fully protected against bad debts, as VR Factoring GmbH assumes the entire default risk of your customers.
You can even further professionalise your entire receivables management and outsource it to VR Factoring GmbH - including your dunning and collection system. You can keep an overview of your finances easily and up to date on a daily basis - thanks to the digital interfaces for your bookkeeping.
Our value added
- Liquidity
- Security
- Service
Do you want to improve your liquidity situation quickly and easily? - Please contact us. We will find a solution in cooperation with our colleagues at VR Factoring.
Financing to shorten the balance sheet
Strongly growing companies are also confronted with higher capital requirements and a higher volume of receivables as business volumes increase. Often at the expense of liquidity and equity. Receivables securitisation can help to manage growth.
Asset Backed Commercial Paper (ABCP) / Asset Backed Securities (ABS) as a financing vehicle
The securitisation of receivables shifts the focus from the creditworthiness of your company to the creditworthiness of the receivables as a basis for financing. Building on this basis, your company can continue to grow with fresh liquidity.
Receivables management remains in your hands, which means that no information about the sale is given to the debtors. A special-purpose entity finances the purchase of receivables on the capital market using short-term asset-backed commercial paper or asset backed securities (ABCP, ABS) or, as an alternative, a credit line from DZ BANK.
Structured Finance Asset Securitization (SFA) im US-Markt
Especially for the US market, we as DZ BANK offer financing via the Commercial Paper Conduit Autobahn without the need for external ratings from renowned agencies or an accompanying syndication. In this way, we also enable non-listed companies to access the US capital market. As a provider of a "one-stop" strategy, we focus on securitisation opportunities in attractive and risk-diversified sector-specific niches.
Our value added
Your financing framework increases flexibly with your receivables volume. At the same time, the financing costs are based on the rating of the receivables portfolio and can therefore offer savings compared to financing based on your company rating. In this context, the experts at DZ BANK provide you with individual advice.
- Many years of recognised expertise at DZ BANK
- Stable financial base
- Balance sheet reduction effect of the sale of receivables
Since 1999, SFA has executed in excess of $10 billion in transaction volume. Utilizing securitization techniques, we enable our clients to enter the capital markets and become eligible for financing based on the quality of a company's receivable portfolio. Our clients are often non-rated (or below IG-rated) originators of receivables with relatively predictable cash flows who seek debt financing to promote long-term growth. When contemplating the structure of a transaction, emphasis is placed on the client's portfolio performance history (i.e. delinquencies, defaults, etc.), the company’s ability to underwrite and service the portfolio of receivables and the reputation and experience of its senior management.
Our main competitive advantage lies in our ability to engineer unique financing solutions tailored to a client’s specific funding needs. In addition to providing lines of credit through the bank’s asset-backed commercial paper conduit, Autobahn Funding Company, LLC, DZ BANK provides term securitization placements for its clients through its broker/dealer, DZ Financial Markets, LLC.
In contrast to most other financial institutions, all aspects of the transaction and customer relationship are managed by one designated deal team. This approach allows us to provide extensive post-closing relationship management in order to accommodate a client's often dynamic business environment.
Our focus has historically been on clients who are underserved by traditional financial institutions due to their size, limited operating history or esoteric nature of their receivables portfolio. Transactions range in size from $25 million to $300 million and can be structured as revolving commitments or term financing up to five years. Asset classes we have financed or currently cover include:
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Insurance Linked
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Risk reduction and liquidity through individual forfaiting solutions
Forfaiting is understood to mean the purchase of receivables from export transactions that become due at a later date, excluding recourse to previous holders of receivables. The most important feature is the surrender of rights and the waiver of recourse.
Due to the low documentation effort, forfaiting is particularly suitable for small amounts and short terms.
A buyer of receivables acquires a receivable in an abstract form, i.e. detached from the underlying transaction, the fulfilment and warranty risks remain with the seller of the receivable. The most common form of forfaiting is the purchase of receivables from letters of credit for future performance. These are either unconfirmed letters of credit or letters of credit confirmed by a third party bank.
Our value added
Risk minimisation:
- Transfer of the political, economic, currency and interest rate risk to the forfaiter
- Balance sheet relief through conversion of its receivables into cash and cash equivalents
- No lines of credit are required or charged to refinance the payment terms granted.
- Improvement of the customer's creditworthiness through liquidity inflow
- Fixed calculation basis through fixed interest rates over the entire term
Improved liquidity through immediate payment:
- Your customer receives payment already upon delivery/service, i.e. the effect of cash payment is achieved despite the granting of payment terms.
Comfortable processing, cost relief:
- Costs regarding monitoring and dunning do not arise for him.
- Forfaiting is a suitable form of financing for any size of company.
- Simple processing.
Contact us in advance so that we can discuss the transaction together and agree with you on the acceptable risk addresses that are relevant for the opening of a letter of credit.
