Receivables Finance

Stephen A. Jones ()
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Stephen A. Jones: AXS Trade Finance Ltd.

Chapter 16 in The Trade and Receivables Finance Companion, 2019, pp 253-275 from Springer

Abstract: Abstract Open account trade in which the seller relies upon settlement of their sales invoice represents the majority of global mercantile flow. A financier that is able to provide a solution which enables the seller to extend competitive trade credit terms to the buyer without detriment to their cash flow, and which is scalable as sales grow, can gain additional clients and generate significant revenue streams. In this chapter, the evaluation of risk is described and the importance of the aged debtor list and credit note history. Key aspects which determine the appropriate financing structure such as disclosed and undisclosed debt purchase facilities, formulation of the prepayment financing percentage, funding limit, rights of recourse, capture of the receivable and the importance of ‘true’ sale for balance sheet de-recognition are discussed.

Keywords: Advance; Audit; Concentration; Contra trade; Credit facility limit calculation; Credit insurance; Credit note history; Creditor list; Debt assignment; Debt purchase; Debt repurchase; Debt turn calculation; Debtor list; Dilutions; Disclosed debt purchase; Financial statement analysis; Fraud; Open account trade; Performance risk; Prepayment percentage; Receivables finance; Recourse; Representations warranties and undertakings; Retention reserve; Sales invoice; Self-liquidating facility; Trade receivable; True sale; Undisclosed debt purchase; Working capital (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/978-3-030-25139-0_16

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