Receivables Financing

GSCF services programs based on Accounts Receivable (AR) of companies. AR Financing programs involve an originating company (Vendor) and its customers (Buyers). These programs can be financed by a third-party Funder and might include Credit Insurance coverage.

GSCF is at the centre of programs, ensuring that data and processes flow seamlessly
GSCF can act as program servicer towards the Funder or the Vendor
Credit Insurance could be established by the Funder or the Vendor

Distribution Financing Factoring Receivables Servicing

Distribution Financing

How does it work?

Distribution Financing is a comprehensive solution that establishes a win-win scenario for the Vendor (sponsor) and it’s chosen Buyers
The Vendor sells the receivables to the Funder on a true sale basis and collects them earlier. The Buyers obtain extended payment terms, paying the Funder upon an extended maturity date
These programs are typically credit insured and require some level of recourse from the Vendor
The Vendor and Funder execute a Receivables Purchase Agreement (RPA) and the Buyers sign a Payment Agreement
Distribution Financing is also known as “Channel Financing” or “Sales Financing”

Benefits

Increase competitiveness by offering Buyers an extension in payment terms
Boost sales and enhance customer relationships
Improve liquidity, and that of Buyers, by accelerating receivables collections and extending Buyer payment terms off-Balance Sheet
Working capital enhancement for Vendor (via reduced Days Sales Outstanding or DSO) and for Buyers (via increased Days Payable Outstanding or DPO)
Reduce credit risk on Buyers

Who can use it?

Companies with high-volume recurrent sales to a portfolio of Buyers, looking to grow sales through enhanced competitiveness whilst maximizing liquidity.

Factoring

How does it work?

A Vendor sells the receivables related to a portfolio of Buyers to a Funder, which accelerates the collection to the Vendor at a discount
The Funder purchases the receivables, assumes the credit risk related to the Buyers and collects from them at invoice maturity
Buyers are either aware of the program (disclosed) or unaware (undisclosed) according to the Vendor’s requirements
Funders typically require some level of recourse back to the Vendor and may obtain credit insurance cover over the Buyer non-payment risk
The Vendor and Funder execute an Receivables Purchase Agreement (RPA)

Benefits

Improve liquidity by accelerating the collection of receivables
Working capital enhancement for Vendor (via reduced DSO)
Transfer credit risk to the Funder

Who can use it?

Companies with high-volume sales to a portfolio of credit-worthy Buyers, seeking attractive short-term financing and an enhanced Balance Sheet.

Receivables Servicing

How does it work?

GSCF assumes the daily administration of trade receivables of a Vendor, including invoices and credit notes processing, reconciliation of Buyer payments, management of individual Buyer limits, dilution tracking, credit analysis, rating and monitoring of Buyers´ performance, automatic alerts and notifications of due and late payments, amongst others
No third-party financing is involved
If there is credit insurance coverage, GSCF ensures that the company stays compliant at all times with the conditions of the policy. These conditions are entered into the platform and invoices are processed after undergoing real-time validation checks. If required, GSCF can assist in obtaining credit insurance cover on the receivables portfolio being serviced

Benefits

Gain administration efficiency by outsourcing all credit and collections tasks
Achieve complete transparency over trade receivables, with information available 24/7 in real-time through GSCF´s dedicated web portal (GIS)
Reduce credit and operational risks
Obtain tailored credit risk cover on all or selected receivables through GSCF

Who can use it?

Companies with sizeable open-account trade receivables looking to streamline credit and collections tasks and enhance risk management.