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Receivable’ Finance Programs’ characteristics and benefits. Tycjan Bielecki Distributors’ Finance Unit Head. What is a Distributor’s Finance Program?. Distributors’ Finance Program is addressed to the selected distribution channels of the Sponsor

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receivable finance programs characteristics and benefits

Receivable’ FinancePrograms’ characteristics and benefits

Tycjan Bielecki

Distributors’ Finance Unit Head

what is a distributor s finance program
What is a Distributor’s Finance Program?

Distributors’ Finance Program is addressed to the selected distribution channels of the Sponsor

It is a settlement tool, aimed at offering additional attractive financing for Sponsor’s commercial partners, optionally with an element of distribution channel risk-sharing between Sponsor and the Bank.

1- Order

4- Goods

2- Goods, Invoice

5-Payment for goods

Retailer/ End-user

Distributor

Sponsor

6- Credit Repayment to the Bank

3- Payment for transaction with Distributor. Means obtained from the loan extended to Distributor by the Bank

program value added
Program value added

Strenghtening Sponsor’s market position

  • Achiveing Distributor’s loyality
  • Enhancing financial and purchasing strength of Distributors:
    • Closing Distributor financing gap between terms of payment against Sponsor and end-Buyers
    • Extending loans to Distributors with financial standing often below general Banking standards
    • Financing with minimum formalities usually required upon lending
    • No requirement for collateral
    • Attractive pricing given clean lending and scope of due diligence on Distributors
program value added cont
Program value added cont.

Limiting Sponsor’s administrative and handling costs

  • Sponsor is freed up from large portion of administrative burden (evalutaion of Distributor financial standing, payment monitoring and control, soft and hard collection is performed by the Bank)
  • In case of hard collection, costs borne by Sponsor within the process are limited solely to external tariff costs set by the Polish law
  • Comprehensive MIS on settlements is avaialble to Sponsor
  • Program administrative handling is limited only to exporting data to the Bank’s electronic system for invoices selected for financing

Strenghtening Sponsor’s financial position

  • Sponsor does not need to extend terms of payment in order to expand sales to Distributors
  • Part of the risk may be shifted to the Bank (Sponsor limits the risk in case of potential significant industry problems)
  • Sponsor enhances its liquidity- invoices are paid by the Bank on the due date
  • Sponsor achieves enhanced Distributor’s payment discipline (obligations against Banks are treated by commercial entities on priority level)
slide5
Bank Handlowy w Warszawie SA

Trade Finance Department

16 Senatorska str.

00-923 Warsaw

Distributors’ Finance Unit HeadTycjan Bieleckitycjan.bielecki@citigroup.com

Phone (desk): +48 (22) 65771 94

Mobile: +48 605 788 066

fax: +48 (22) 692 21 32

Key contacts

what is a kuke program
What is a KUKE Program?

= invoice discounting program with recourse limited to exclusions from insurance cover – mainly commercial disputes

= program secured under KUKE insurance policy, in which the Bank is the beneficiary

The insurance policy covers

domestic foreign

receivables receivables

advance rate – 85% advance rate – 95%

program s benefits
Financing, which is an attractive alternative for traditional credit

Taking over of non-payment risk of the Buyer

High advance rates - 95% (foreign), 85% (domestic) of receivable value

Possibility to offer competitive payment terms to the contracting parties

BHW as the factor disciplines the Debtor

Program’s Benefits
slide10
Bank Handlowy w Warszawie SA

Trade Finance Department

16 Senatorska str.

00-923 Warsaw

Trade Finance (Team Leader) Magdalena Laskowska magdalena.laskowska@citigroup.com

Phone (desk): +48 (22) 6929031

Mobile: +48 605980397

fax: +48 (22) 692 21 32

Key contacts