Factoring

Exchange rates

as of 09/01/2025 12:34:28

Cash payment

Non-cash payment

Selling rate

1.96100

1.96000

Buying rate

1.94800

1.94900

BNB fixing

1.95583

Cash payment

Non-cash payment

Selling rate

1.93800

1.93500

Buying rate

1.85400

1.85600

BNB fixing

1.89794

Cash payment

Non-cash payment

Selling rate

2.39900

2.39400

Buying rate

2.27400

2.27800

BNB fixing

2.33370

Cash payment

Non-cash payment

Selling rate

2.12400

2.12200

Buying rate

2.03000

2.03200

BNB fixing

2.08133

Factoring explained

Factoring is an instrument for а full-scale management of trade receivables involving financing, collection of accounts receivable and an opportunity to cover the risk of non-payment by trade counterparties.

Financing against assigned accounts receivable with no need of additional collateral

Should you be a production or a trade company supplying regularly to clients, while applying deferred payment between 15 and 180 days, factoring enables you to:

On the invoice issuing date receive in advance, in your current account , up to 90-95% of the invoiced value.
Improve the liquidity of your company
Negotiate deffered payment period periods with your clients
Increase your sales volumes with your existing clients, as well as new perspective clients

Management and collection of receivables

If you sell on deferred payment terms, the UBB AD factoring service will help you with the management and collection of trade receivables via: :

Keeping main focus on your company’s core business, while assigning the collection and account recievables management to UBB AD
Limit your administrative costs and efforts
Improve account receivables collectability.

Assessment of the risk, associated with trade counterparties

An opportunity for assessment the solvency of your existing and/or prospective clients
Constant monitoring of existing and/or prospective clients payment behavior
Timely and active management of receivables arrears thus limiting potential loss from receivables collection.

Coverage of the risk associated with non-payment by trade counterparties

Factoring also provides protection against non-payment by trade counterparties within a pre-approved credit limit per single buyer/debtor.
The respective service enable penetration of new markets, increase of trade volumes with existing customers, support initiation of relationships with new customers without additional risk undertaking.

Mechanism

The Seller signs factoring agreement with UBB AD and notifies his Buyer in writing for the assignment of all hit current and future receivables in favor of UBB.

The Buyer confirms to UBB that it agrees with the receivables assignment and commits to transfer/route due amounts/payments under all assigned invoices to an UBB AD owned account .

The Seller supplies products and/or services to the Buyer for which invoices with deferred payment are issued.

The Supplier submits copies of the issued invoices to UBB along with the documents for the executed delivery.

UBB transfers in advance to the Supplier the preliminary agreed percentage from the assigned invoices value of the to the Supplier’s account with UBB AD.

UBB administers and collects the receivables under the assigned invoices.

The Payer pays 100% of the invoice value to the pre-agreed /specified UBB AD owned account, from where the advance payment is repaid and the residual amount is transferred to the Client’s account.

With non-recourse factoring, in the event of non-payment by the Payer, the Factor shall cover the loss up to a predetermined percentage from the value of the receivable invoice/s representing pre-approved credit sub-limit for the respective Payer.

Advantages and benefits

Fast and flexible advance payment against assigned accounts receivable with no need to ensure additional collateral.
Liquidity and cash flow optimization
Opportunity to provide deferred payment to Buyers, thus being able to increase sales volumes
Management and control of the accounts receivable
Opportunity to outsource receivables administration and collection to UBB AD
Protection against the risk of non-payment by trade counterparties

Target clients

Manufacturing and trading companies, supplying goods/services between 30 ÷ 180 days deferred payment basis
Companies with properly diversified customer portfolio
Companies not legally related to its customers/payers

Eligible Payers

Companies, having acceptable financial standing
Companies, having regular purchases with the underlying Supplier
Companies that agree to get involved in a factoring transaction

Factoring types

Factoring is a tool for receiving working capital funds, solely based on born receivables stemming from the executed delivery of goods/services, with no additional collateral.

Recourse Factoring
Non-recourse Factoring

Advantages and parameters>>

Glossary of terms

Supplier

Legal entity, supplying goods/services under deferred payment conditions

Payer/Debtor/Buyer

Legal entity, purchasing goods/services on deferred payment terms.

Factor

Financial institution, licensed to offer factoring services

Accounts receivable

The amount that the Supplier is entitled to receive from a Buyer/Payer as result of a regular supply of goods/services on deferred payment terms.

Invoice payment date

The specified invoice payment date

Cession/Assignment of receivables

Transfer the title of receivables ownership f/o third party (Factor).

Notification for assignment of receivables

Written notification from a Supplier/Seller to a Payer/Buyer for the transfer of receivables in favour of a Factor

Confirmation

Written confirmation by a Buyer/Payer to the Factor representing formal consent to the transfer of receivables

Financing of receivables

Advance payment against assigned accounts receivable up to a maximum percentage from the receivable value

Maximum percentage of financing

The absolute amount for cumulative advance payment extension.

Right for recourse

The Factor’s right to request reimbursement of provided advance payment in case of non-payment by the Buyer/Debtor on the advanced invoice/s payment date.

Maximum percentage of risk coverage

The maximum percentage per receivable/invoke up to which the Factor accepts to cover the risk of non-payment by the Buyer/Debtor.

Frequently asked questions

Why factoring?

Advancing/financing without involvement of tangible assets and without restriction for the use of the advance funds
The amount of financing corresponds to the sales volumes
Partnering with a financial institution in the collection of receivables
Release of resource that can be used for the core activity
Obtaining information about the creditworthiness of current and/or potential trade counterparties
Ensuring of risk coverage for non-payment by business counterparties up to a preliminary set limit and maximum percentage of the account receivable value
Factoring creates room for flexibility when making business decisions

What is the effect of a factoring deal on the relations between commercial counterparties and what are the commitments of the payers under the transaction?

With the initial credit assessment of the payers (buyers) the Factor does not enter into a direct contact with latter, unless being particularly instructed or encouraged by the Supplier consent.
Before factoring agreement signing, it is recommended that the Supplier should obtain the prior consent of the Buyer with his particular factoring deal involvement.
Buyer’s/Payers’ commitment in a factoring transaction is to provide its consent in writing to the assignment of receivables in favor of UBB, payment of assigned invoices to an account of the Factor - UBB and periodic confirmation of the validity of invoices in case this is set as a condition precedent under the factoring agreement.

Do Supplier involved in a factoring transaction need to assign to its receivables?

Yes, all receivables under invoices, issued to the approved Buyers/Payers under the factoring transaction need to be assigned in favour of UBB AD.

How is the price of a factoring transaction being structured?

Interest rate for advance payments - calculated on an annual basis for the period from the date of the advance payment until its actual repayment
Factoring commission - calculated as a percentage of the value of each assigned invoice
Administrative fee for processing of invoices - fixed amount regarding each assigned invoice

With the initial credit assessment of the payers (buyers) the factoring company does not enter into a direct contact with them without your explicit consent.
Before signing a factoring agreement it is recommended that buyers should grant their prior consent to their participation in a factoring transaction
It is an obligation of payers to agree in writing to the assignment of receivables in favour of UBB, to transfer the funds under assigned invoices to an account of UBB, as well as to periodically confirm the validity of assigned invoices, should the latter be a condition, stipulated in an agreement.

What type of accounts receivable are factorable?

Receivables that originate from executed delivery of goods between a Seller and a Buyer, for which invoices on deferred payment basis have been issued
Receivables that up to the moment of assignment are not matured/due
Receivables that are not encumbered in favor of third parties
Lack of prohibition for receivables assignment
Receivables are not subject offsetting sequence of executed counter-trade

Should Supplier and Buyer/Payer have signed commercial agreement?

Not obligatory but commercial contracting need to be shaped up in an applicable manner.

Our contact details

E_mail: factoring_sales@ubb.bg

Telephones:

+359 2 811 29 67
+359 2 811 29 66
+359 2 811 29 73
+359 2 902 92 73
+359 2 811 29 49
+359 2 811 29 51
+359 2 811 29 52
+359 2 811 29 64

Choose segment

For companies with annual turnover up to 2 mln BGN

For companies with annual turnover above 1 mln BGN

For agri producters

For freelancers with annual turnover below 1 mln BGN

Number of employees:

Region:

Activity sector:

Contact us

Offices and ATMs

Online/Mobile

Fees and terms

Exchange rates

Factoring

Factoring explained

Financing against assigned accounts receivable with no need of additional collateral

Management and collection of receivables

Assessment of the risk, associated with trade counterparties

Coverage of the risk associated with non-payment by trade counterparties

Mechanism

Advantages and benefits

Target clients

Eligible Payers

Factoring types

Glossary of terms

Frequently asked questions

Our contact details