| Name of procedure |
Brief description |
Benefits |
Disadvantages |
| 1 |
2 |
3 |
4 |
| Spontaneous financing |
Providing discounts to customers for shorter settlement periods |
1) An inexpensive way to obtain funds;2) benefit for the buyer: does not require collateral, long grace periods;3) benefit for the supplier: reduction of the payment period. |
1) For the buyer: the amount of bank interest may be higher than the received discount;2) for the supplier: careful calculation of the discount size is required. |
| Factoring |
Activities of a particular organization for the recovery of funds from customer debtors. |
1) The ability to immediately receive a payment for the shipped goods, without waiting for payment from the buyer;2) acceleration of working capital;3) covering a significant part of the risks by the bank. |
1) Fee for processing documents;2) factoring commission;3) interest in the use of funds provided by the bank to the client immediately after the shipment of the goods. |
| Forfaiting |
Transaction for the forfeiter to acquire a financial obligation of a borrower to a creditor.All the risks associated with the debt obligation are transferred to the forfeiter without the right of circulation to the seller’s obligations. |
1) Simplification of the balance sheet of possible liabilities;2) improvement of liquidity;3) the absence of risks and costs associated with the activities of credit bodies. |
1) Relatively high costs of transferring risks to forfeiter;2) the bank in the securities market can sell loan documents; 3) the duration of the transaction. |
