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.
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.
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 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:
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: