How to avoid the risk of non-payment

Our foreign parent company produces office equipment and we have been successfully selling it in the Czech Republic for more than 10 years. Last year our parent company decided that our company would be a distribution center for the whole central Europe.

One of the new tasks we needed to solve in connection with the expansion was securing the risk of non-payment of new foreign customers we had not known until then. We discussed possible ways of securing (e.g. L/C or payment guarantee)  with our bank, but - as we were said - these instruments were not common in our field of business and our customers would not have accepted them.

 

Finally, we decided to start cooperation with CSOB Factoring. This company offered so-called without-recourse factoring to us, a product that combines financing and credit insurance together with management of receivables. We got credit limits for each foreign customer and CSOB Factoring took over the risk of non-payment (in case of payment inability or unwillingness of our customers) up to these limits.

 

As an individual exporter we would never get such a good price for this service as CSOB Factoring gave us. 

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