Trade Finance

In increasingly competitive environment efficient supply chain management and working capital optimization are key to success of your business. AO Citibank Supplier Finance Program supports your suppliers' financing needs while ensuring uninterrupted supply flow and improving your own working capital through longer payment terms.

Supplier Finance

Following the global trends, more and more companies in Russia are having greater targets for payment terms extension. This puts additional pressure on suppliers' working capital and may entail need of extra financing to support supply at the required level. AO Citibank Supplier Finance program is designed to provide short-term trade financing to selected suppliers of our well-established customers.

Key Benefits for Buyers
  • A steady flow of goods from suppliers
  • Enhanced relationships with suppliers
  • Extended open account payment terms
  • Ability to support cross-border flows
Key Benefits for Suppliers
  • Accelerated cash flow
  • Access to cheaper source of financing
  • Processing efficiency
  • Flexible financing options
  • Financing of foreign currency contracts

Under the Supplier Finance program, AO Citibank works closely with the buyer to tailor a structure, which in turn enables AO Citibank to provide receivables financing to those suppliers designated. Essentially, AO Citibank enters into a financing arrangement that includes purchasing of their trade receivables. AO Citibank then collects receivables directly from the buyer.

Trade Loans

Trade Loan is a product which enables companies to obtain current financing for trade transactions, both before and after delivery. This solution is designed first of all to ensure working capital required to perform trade obligations.

Trade Loans may be provided in two variants:

  • Seller (Export) Financing � where working capital is provided to finance the delivery of a trade order (pre-financing) or to obtain financing in advance to grant a deferred payment date to a contractor (financing connected with issuance of an invoice)
  • Buyer (Import) Financing � where working capital is provided to make a payment to a supplier (either before or after the invoice is issued by the supplier).

Advantages

  • inancing before or after delivery, or both
  • credit amount is paid upon a request submitted via an electronic banking system
  • working capital is financed without receivables assignment to the Bank

Receivables Financing

Manufacturing and trading companies frequently need to offer prolonged payment dates to their customers. On many occasions payments for delivered goods and services are made days or weeks after contractual payment dates. This usually happens when customers face temporary cash shortages and are just unable to pay for delivery on time. And the resulting gap often distorts the cash conversion cycle.

Companies make attempts to solve this problem looking for tools that will enable them to collect their receivables sooner and for solutions that will improve their cash flows in trade operations with deferred payment dates.

In order to allow them to implement aggressive sales growth strategies and make payment dates more flexible and, at the same time, to ensure them fast access to cash, AO Citibank has prepared an attractive Receivables Financing proposal.

We are offering a financial solution where the Bank acquires short-term receivables from trade transactions, documented with invoices, prior to their payment dates, with deduction of fees, and either taking over (without or limited recourse scheme) or not (with recourse scheme) the insolvency risk of buyer.

Factoring transactions involve three parties:

  • Client (Assignor, Supplier, Seller) � i.e. the party that disposes of receivables (seller or vendor of goods/services)
  • Bank � as the party that acquires receivables
  • Buyer (Assignee) � i.e. the customer of the Client who is obliged under the contract to make specified payments to the Client.


Product highlights

  • the Bank takes over the risk of non-payment generated by buyers (under non and limited recourse structures)
  • the financial condition of the Client is not reviewed (for non-recourse structures only)
  • the buyer is required to accept liabilities to be paid (for non-recourse structures only)
  • discount up to 100% of trade receivables in domestic transactions
  • financing until the invoice payment date
  • the solution used may be tailored to the Client�s needs subject to applicable laws and banking regulations