Financing of trade receivables

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Objective: turn your Accounts Receivable (30–120 days) into immediate draw capacity, without diluting equity and without clogging your traditional bank lines.





The 5 PrestaFlex solutions (from CHF 100,000 to 60M)





    

  1. Notified receivables assignment (factoring-type)

      

    • Advance 70–90% per invoice, balance on collection.
      • 




    • With or without recourse, domestic or export.
      • 

    

    2. 




  2. “Confidential” Invoice Discounting (non-notified)

      

    • Revolving line backed by a borrowing base on your receivables; you keep the collections.
      • 




    • Ideal if you want to avoid the “factoring effect” with clients.
      • 

    

    3. 




  3. ABL – Asset-Based Lending (AR + Inventory)

      

    • Availability = 85% of eligible receivables + 40–60% of eligible inventory – reserves.
      • 




    • Suited to industrial/retail SMEs with significant inventories.
      • 

    

    4. 




  4. Export AR + trade credit insurance

      

    • High advances (up to 90%) on EU/UK/US debtors; default risk externalised.
      • 

    

    5. 




  5. “Securitization-lite” programme (≥ 10–15M)

      

    • Dedicated vehicle; potential off-balance-sheet treatment depending on accounting standards and risk transfer.
      • 

    

    6. 






Indicative costs









Eligibility rules (borrowing base)









Formula (simplified):
Availability = (Eligible AR × advance rate) − reserves − outstanding draws.





4 worked examples (simple and actionable)





1) “Confidential” AR line — pure borrowing base









2) Insured export, 60 days — high advance









3) ABL mix AR + Inventory — production peak









4) “Confidential” + supplier discount — self-funding operation









Why this lifts your operating capacity









PrestaFlex implementation (fast and pragmatic)





    

  1. Pre-analysis (24–72h): top-20 debtors, 12-month AR ageing, disputes/credit notes, concentration, DSO, anti-assignment clauses.
    2. 




  2. Term sheet: facility cap, advance rates by debtor, model (notified / confidential / ABL), fees, exit conditions.
    3. 




  3. Onboarding (5–10 days): assignment/trust assignment, collection accounts (lockbox), ERP/API flows, standard reporting.
    4. 




  4. In-life: on-demand draws, dynamic caps based on payer behaviour, DSO/dilution reporting.
    5. 






Document pack: Kbis/trade register extract, IBAN, T&Cs/contracts, proof of delivery, AR ageing, debtor list, collection history, any trade credit-insurance policy.





When to prioritise each model (handy shortcut)









Next step





Send us your AR ageing, top-20 debtors, average terms, and monthly volume.
We’ll come back with a tailored PrestaFlex simulation (advance rates by debtor, facility cap, estimated monthly cost) and an implementation timeline aligned with your deadlines.







  


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  1. Blog

Objective: turn your Accounts Receivable (30–120 days) into immediate draw capacity, without diluting equity and without clogging your traditional bank lines.

The 5 PrestaFlex solutions (from CHF 100,000 to 60M)

  1. Notified receivables assignment (factoring-type)
    • Advance 70–90% per invoice, balance on collection.
    • With or without recourse, domestic or export.
  2. “Confidential” Invoice Discounting (non-notified)
    • Revolving line backed by a borrowing base on your receivables; you keep the collections.
    • Ideal if you want to avoid the “factoring effect” with clients.
  3. ABL – Asset-Based Lending (AR + Inventory)
    • Availability = 85% of eligible receivables + 40–60% of eligible inventory – reserves.
    • Suited to industrial/retail SMEs with significant inventories.
  4. Export AR + trade credit insurance
    • High advances (up to 90%) on EU/UK/US debtors; default risk externalised.
  5. “Securitization-lite” programme (≥ 10–15M)
    • Dedicated vehicle; potential off-balance-sheet treatment depending on accounting standards and risk transfer.

Indicative costs

  • Service fees: ~0.3–1.5% of assigned volume (depending on model/volume/risk).
  • Interest: benchmark (e.g., SARON) + margin (2.5–6.0% p.a.) on the drawn amount.
  • Non-recourse: slightly lower advance (often ≤ 85%) but default risk transferred.

Eligibility rules (borrowing base)

  • Ageing: invoices ≤ 90 days from invoice date (or ≤ 60 days past due).
  • Exclusions: disputes/credit notes, intercompany, contra-entries, anti-assignment clauses, > X% concentration per debtor.
  • Reserves: dilution (credits, rebates), concentration (share of a large client above the cap), disputes.

Formula (simplified):
Availability = (Eligible AR × advance rate) − reserves − outstanding draws.

4 worked examples (simple and actionable)

1) “Confidential” AR line — pure borrowing base

  • Gross AR: CHF 2,500,000
  • Ineligible: > 90d = 200,000; intercompany = 50,000
  • Eligible before concentration: 2,500,000 − 200,000 − 50,000 = 2,250,000
  • Largest debtor = 900,000, cap 25% ⇒ max 562,500; excess = 900,000 − 562,500 = 337,500
  • Final eligible: 2,250,000 − 337,500 = 1,912,500
  • Advance rate: 85% ⇒ 1,912,500 × 0.85 = 1,625,625
  • Dilution reserve: 30,000
  • Availability: 1,625,625 − 30,000 = CHF 1,595,625
  • Interest (5.0% p.a., 30d, draw 1.3M) ≈ CHF 5,342; service fees (0.25% on 1M assigned/month) = CHF 2,500.
    → Immediate cash for purchases/payroll without touching the overdraft.

2) Insured export, 60 days — high advance

  • EU invoice batches: CHF 750,000 at 60d, credit insurance 90%
  • Advance rate: 90% ⇒ CHF 675,000 paid D+1/D+2
  • Interest (5.5% p.a., 60d) ≈ CHF 6,105
  • Service fees: 1.0% of face = CHF 7,500
    → Total cost ≈ CHF 13,605 (≈ 1.81%); default risk transferred.

3) ABL mix AR + Inventory — production peak

  • Eligible AR: CHF 3,000,000 ⇒ 85% = 2,550,000
  • Eligible inventory (at cost): CHF 1,200,000 ⇒ 50% = 600,000
  • Reserves: quality/obsolescence = 100,000
  • Total availability: 2,550,000 + 600,000 − 100,000 = CHF 3,050,000
    → Launch a pilot run + raw materials without supplier prepayment.

4) “Confidential” + supplier discount — self-funding operation

  • Assigned volume/month: CHF 1,000,000; average draw: CHF 800,000
  • 2% early-payment discount with suppliers (payment D+10) = CHF 20,000
  • Interest (5% p.a., 50d on 800,000) ≈ CHF 5,479
  • Fees (0.20% on 1,000,000) = CHF 2,000
    → Net gain ≈ CHF 12,521 / month while securing the supply chain.

Why this lifts your operating capacity

  • “Perceived” DSO drops mechanically (cash at D+2 instead of D+45/90).
  • Negotiating power: you capture early-payment discounts (1–3%), often > financing cost.
  • Margin effect: more positive-margin buy/sell turns in the same period.
  • Covenants: a cleaner substitute for overdraft, less volatile if the line is well calibrated.

PrestaFlex implementation (fast and pragmatic)

  1. Pre-analysis (24–72h): top-20 debtors, 12-month AR ageing, disputes/credit notes, concentration, DSO, anti-assignment clauses.
  2. Term sheet: facility cap, advance rates by debtor, model (notified / confidential / ABL), fees, exit conditions.
  3. Onboarding (5–10 days): assignment/trust assignment, collection accounts (lockbox), ERP/API flows, standard reporting.
  4. In-life: on-demand draws, dynamic caps based on payer behaviour, DSO/dilution reporting.

Document pack: Kbis/trade register extract, IBAN, T&Cs/contracts, proof of delivery, AR ageing, debtor list, collection history, any trade credit-insurance policy.

When to prioritise each model (handy shortcut)

  • Notified / non-recourse: heterogeneous client risk, need to transfer default risk.
  • Confidential: key accounts, strong internal collections process, image concerns.
  • ABL (AR + Inventory): industry/commerce with large inventories.
  • Export + insurance: international growth, 60–120d terms.

Next step

Send us your AR ageing, top-20 debtors, average terms, and monthly volume.
We’ll come back with a tailored PrestaFlex simulation (advance rates by debtor, facility cap, estimated monthly cost) and an implementation timeline aligned with your deadlines.

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