Receivables financing (AR financing)

Our aim is to transform your receivables (30-120 days) into immediate drawing capacity, without diluting your capital or saturating your traditional bank lines.

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

  1. Notified assignment of receivables (factoring type)
    • 70-90% advance per invoice, balance on collection.
    • With or without recourse, domestic or export.
  2. Invoice Discounting "confidential" (not notified)
    • Revolving line backed by a borrowing base on your receivables; you retain collection.
    • Ideal if you want to avoid the factoring effect on your customers.
  3. ABL - Asset-Based Lending (Receivables + Inventory)
    • Drawdown = 85% of eligible receivables + 40-60% of eligible inventory - reserves.
    • Suitable for industrial/trading SMEs with significant inventories.
  4. Export AR + credit insurance
    • High advances (up to 90%) on EU/UK/US debtors, external default risk.
  5. Securitization-lite program (≥ 10-15 M)
    • Dedicated vehicle, off-balance sheet possible according to accounting standards and risk transfer.

Indicative costs

  • Service fee: ~0.3-1.5% of volume sold (depending on model/volume/risk).
  • Interest: index (e.g. SARON) + margin(2.5-6.0% p.a.) on advance used.
  • Non-recourse: slightly lower advance (often ≤ 85%) but default risk transferred.

Eligibility rules (borrowing base)

  • Age: invoices ≤ 90 days from invoice date (or ≤ 60 d after due date).
  • Exclusions: disputes/claims, intercos, reversals, anti-sale clauses, > X% concentration per debtor.
  • Reservations: dilution (credit notes, discounts), concentration (share of a large customer beyond cap), disputes.

Formula (simplified):
Availability = (Eligible receivables × Advance rate) - Reserves - Drawings in progress.

4 examples (simple and actionable)

1) "Confidential" AR line - borrowing pure basis

  • Gross trade receivables: CHF 2,500,000
  • Ineligible: > 90 d = 200,000; interco = 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 eligibility: 2,250,000 - 337,500 = 1,912,500
  • Rate of advance: 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% / year, 30 d, drawdown 1.3 M) ≈ CHF 5,342; service charge (0.25% on 1 M sold/month) = CHF 2,500.
    → Immediate cash for purchases/salaries without touching bank overdraft.

2) Export insured, 60 days - high advance

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

3) ABL mix Receivables + Inventory - peak production

  • Eligible receivables: 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 of a pilot series + raw material without supplier advance.

4) "Confidential" + supplier discount - self-financing operation

  • Volume sold/month: CHF 1,000,000; average print run: CHF 800,000
  • 2% supplierdiscount (payment D+10) = CHF 20,000
  • Interest (5% p.a., 50 d on 800,000) ≈ CHF 5,479
  • Expenses (0.20% on 1,000,000) = CHF 2,000
    → Net gain ≈ CHF 12,521 / month while securing the supply-chain.

Why it boosts your operational capacity

  • Perceived DSO drops mechanically (cash J+2 instead of J+45/90).
  • Negotiating power: you capture discount rebates (1-3%), often > cost of financing.
  • Margin effect: more buy/sell rotations with positive margins over the same period.
  • Covenants: clean substitute for overdraft, less volatile if well-calibrated.

PrestaFlex implementation (fast and pragmatic)

  1. Pre-analysis (24-72 h): top 20 debtors, 12-month aged trial balance, disputes/claims, concentration, DSO, anti-sale clauses.
  2. Term sheet: ceiling, advance rate per debtor, model (notified / confidential / ABL), fees, exit conditions.
  3. Onboarding (5-10 days): assignment/trust assignment, lockbox accounts, ERP/API flows, standard reporting.
  4. Operation: on-demand draws, dynamic caps based on payer behavior, DSO/dilution reporting.

Document set: KBis/RC, IBAN, GTC/contracts, proof of delivery, aged trial balance, debtor list, collection history, credit insurance policy if applicable.

When to use each model (useful shortcut)

  • Notified / non-recourse: heterogeneous customer risk, need to transfer default.
  • Confidential: major accounts, solid internal collection process,image at stake.
  • ABL (AR + Stock): industry/commerce with large inventories.
  • Export + insurance: international growth, 60-120 day tenors.

Next step

Send us your aged trial balance, top 20 debtors, average due dates and monthly volume.
We'll get back to you with a customized PrestaFlex simulation (advance rate per debtor, line cap, estimated monthly cost) and a deployment schedule tailored to your deadlines.

An article by Munur Aslan, Director of PrestaFlex

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