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    Liabilities from reverse factoring are usually included in the calculation of those financial key figures that are based on the debt of the customer. These are, for example, the leverage and the ratio of debt to equity (gearing). In addition, it depends on the exact basis of calculation of each financial key figure, so that consideration, for example, in the context of the calculation of debt service (Debt Service Cover) comes into consideration.

    The Liabilities Now

    In addition, these liabilities also have to be taken into account in the case of general conduct obligations if the credit agreement provides for restrictions with regard to the entering into of further financial liabilities. For the factoring of receivables this is an essential part.

    Unless the case of the reverse factor has already been considered in the negotiation of the credit agreement, this may mean that the financial key figures can no longer be adhered to or included due to the inclusion of liabilities from reverse factoring in the calculation of the debtor’s debt In the case of general conduct, previously agreed thresholds for entering further financial liabilities are exceeded. Both violations would justify a ground for termination.

    The Solutions Now

    As a solution to the above problem, it is advisable within the definition of financial liabilities or directly in the calculation of the financial key figures to agree redemption for the liabilities of the customer against the factor from the reverse factoring. This can be done, for example, through non-inclusion or corresponding exceptions to the financial ratios and general conduct obligations.

    Conclusion

    From an economic point of view, reverse factoring offers both the buyer and the supplier an attractive model for the design of the supply relationship, since the customer can make maximum use of longer payment terms and the supplier receives liquidity at short notice.

    • With regard to the accounting classification of the liabilities of the customer to the factor, however, it should be noted that there are certain uncertainties, so it is advisable to thoroughly examine an intended reverse factoring together with the own auditor in terms of the balance sheet effects.

    In addition, it is to be examined in the case of intended reverse factoring to what extent this can have an impact on existing loan financing. In particular, it should be taken into account that the liabilities of the customer compared with the factor from reverse factoring may have to be taken into account when calculating the financial ratios and in the context of general conduct obligations and may lead to shifts at the expense of the customer as borrower.

    For this reason, intentional reverse factoring should also be discussed with the financing bank and, if necessary, appropriate modifications to the calculation of financial ratios as well as corresponding exceptions or maximum values ​​within the framework of general conduct obligations should be agreed.

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