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Improving Supply Chain Profit Through Reverse Factoring
International Journal of Financial Studies Article Improving Supply Chain Profit through Reverse Factoring: A New Multi-Suppliers Single-Vendor Joint Economic Lot Size Model Beatrice Marchi 1,* , Simone Zanoni 1 and Mohamad Y. Jaber 2 1 Department of Mechanical and Industrial Engineering, Università degli Studi di Brescia, via Branze 38, I-25123 Brescia, Italy; [email protected] 2 Department of Mechanical and Industrial Engineering, Ryerson University, Toronto, ON M5B 2K3, Canada; [email protected] * Correspondence: [email protected] Received: 2 December 2019; Accepted: 3 April 2020; Published: 9 April 2020 Abstract: Supply chain finance has been gaining attention in theory and practice. A company’s financial position affects its performance and survivability in dynamic and volatile markets. Those that have weak financial performance are vulnerable when operating in environments that are uncertain and financially unstable. Companies adopt various solutions and techniques to manage, effectively and efficiently, the flow of money to and from its suppliers and buyers. Reverse factoring is an innovative technique in supply chain financing. This paper develops a joint economic lot size model where a vendor coordinates operational and financial decisions with its multiple suppliers through the establishment of a reverse factoring arrangement. The creditworthy vendor systematically informs a financial institution (e.g., bank) of payment obligations to selected suppliers, enabling the latter to borrow against the value of the relevant accounts receivable at low interest (borrowing) rates. The paper also presents a numerical example and a sensitivity analysis to illustrate the behavior of the model and to compare the economic and operational performance of a supply chain with and without a reverse factoring agreement. -
Project-Finance-Second-Edition-Boj.Pdf
The BOOK of JARGON ® Project Finance The Latham & Watkins Glossary of Project Development, Acquisition and Finance Slang and Terminology Second Edition Latham & Watkins operates worldwide as a limited liability partnership organized under the laws of the State of Delaware (USA) with affiliated limited liability partnerships conducting the practice in the United Kingdom, France, Italy and Singapore and as affiliated partnerships conducting the practice in Hong Kong and Japan. Latham & Watkins practices in Saudi Arabia in association with the Law Office of Salman M. Al-Sudairi. In Qatar, Latham & Watkins LLP is licensed by the Qatar Financial Centre Authority. Under New York’s Code of Professional Responsibility, portions of this communication contain attorney advertising. Prior results do not guarantee a similar outcome. Results depend upon a variety of factors unique to each representation. Please direct all inquiries regarding our conduct under New York’s Disciplinary Rules to Latham & Watkins LLP, 885 Third Avenue, New York, NY 10022-4834, Phone: +1.212.906.1200. © Copyright 2013 Latham & Watkins. All Rights Reserved. 2 The purpose of this publication is to assist the newest members of the project finance community in learning to talk the talk of project finance. It is intended to be a “Berlitz Course” for recent law school and business school graduates seeking initiation into the industry, and a desktop reference for not-so-recent graduates. In this book, you will find the key to the secret verbal handshakes that make up the code of the project finance community. We love this stuff. The PF Book of Jargon is one of a series of practice area-specific Books of Jargon published by Latham & Watkins. -
Healthcare Factoring and Medical Invoice Factoring, Explained
Healthcare Factoring and Medical Invoice Factoring, Explained What is factoring? Healthcare factoring, sometimes called “medical factoring” or “medical receivables factoring,” provides instant capital to medical providers, including, physicians, medical practices, diagnostic and imaging facilities, nursing homes, hospitals, home health care companies, and surgery centers to fund ongoing business operations. The term “factoring” refers to the outright purchase and sale of accounts receivable (“A/R”) invoices at a discount from a provider’s full billed charges. Factoring companies engaged in the business of purchasing accounts receivable are called “factors.” Healthcare providers selling their accounts receivables in the factoring transaction are referred to as “sellers.” The seller’s customers, who are in some instances the patients receiving healthcare services from the provider, and in others insurance carriers or government payers, are generally referred to as “account debtors.” The cash which a factor disburses to the seller as payment for the accounts receivable for services rendered to the debtor are typically called an “advance.” Why is medical receivables factoring advantageous? Factoring receivables is an attractive option for healthcare providers in that it involves the transfer of an asset rather than a loan of money. Factors primarily focus on the ability to collect the account receivable being purchased rather than the credit worthiness of the healthcare provider. This makes factoring a suitable transaction for many growing businesses when traditional medical financing or commercial lending proves impractical or unavailable. Factoring also provides immediate cash access with little to no wait period, as factoring companies disburse payments quickly following invoicing. Factoring companies also provide relief through the handling of all invoicing, and transfers the responsibility of collecting payment from no-pay and slow-pay clients from the provider to the factor. -
Intro to Factoring
Factoring and Commercial Finance: An Introduction The EUF is the Representative Body for the Factoring and Commercial Finance Industry in the EU. It comprises national and international industry associations that are active in the EU. The EUF seeks to engage with Government and legislators to enhance the availability of finance to business, with a particular emphasis on the SME community. The EUF acts as a platform between the factoring and commercial finance industry and key legislative decision makers across Europe bringing together national experts to speak with one voice. The EUF acts as a source of reference and expertise between the factoring and commercial finance industry and key legislative decision makers across Europe. Its aim is to provide legislators and policy makers with vital industry information to inform, influence and assist with the direction of existing and future finance legislation. It seeks to ensure the continued provision of prudent, well structured and reasonably priced finance to businesses across the EU. Content To gain an overview: An introduction to Factoring and Commercial Finance 2 • Factoring basics 2 • How does it work? 3 A win-win form of funding: financing economic growth while 4 ensuring financial stability • Factoring benefits 5 • A stability focused financing tool 6 To get more detail: 7 Further information 7 • Who can use factoring? Who offers the service? 7 • How does it work in more detail? 7 • Main Product Types: 9 • Recourse, Non-Recourse Factoring 9 • Invoice Discounting 10 • Other variants 10 • How Risks are managed in Factoring? 11 • Accounting & Reporting for Factoring 12 • Glossary 13 An Introduction to Factoring and Commercial Finance Factoring Basics Factoring is a long-established way of providing a range of business support services: • Working Capital (Finance) • Credit Assessment of customers/ buyers • Sales Ledger Management and Collection • Credit Cover Across Europe, where it is well established, the Industry represents 10% of GDP; globally the figure is around 3.5% and rising. -
Securitisation 2020
Securitisation 2020 A practical cross-border insight to securitisation work 13th Edition Featuring contributions from: Allen & Overy LLP Macfarlanes LLP Roschier Advokatbyrå AB Brodies LLP Maples Group Schulte Roth & Zabel LLP Cuatrecasas Mayer Brown Shearman & Sterling LLP Freshfields Bruckhaus McMillan LLP Sidley Austin LLP Deringer LLP Nishimura & Asahi VdA GSK Stockmann Oon & Bazul LLP Walder Wyss Ltd. King & Wood Mallesons Orrick, Herrington & Sutcliffe (Europe) Waselius & Wist Loyens & Loeff Luxembourg S.à r.l. LLP ISBN 978-1-83918-046-0 ISSN 1745-7661 Published by 59 Tanner Street London SE1 3PL United Kingdom Securitisation 2020 +44 207 367 0720 [email protected] th www.iclg.com 13 Edition Group Publisher Rory Smith Editor Jane Simmons Senior Editor Contributing Editor: Sam Friend Rupert Wall Head of Production Suzie Levy Sidley Austin LLP Chief Media Officer Fraser Allan CEO Jason Byles Printed by Stephens & George Print Group Cover image www.istockphoto.com ©2020 Global Legal Group Limited. All rights reserved. Unauthorised reproduction by any means, Strategic Partners digital or analogue, in whole or in part, is strictly forbidden. PEFC Certified Disclaimer This product is from sustainably managed forests and controlled sources This publication is for general information purposes only. It does not purport to provide comprehen- PEFC/16-33-254 www.pefc.org sive full legal or other advice. Global Legal Group Ltd. and the contributors accept no responsibility for losses that may arise from reliance upon information contained in this publication. This publication is intended to give an indication of legal issues upon which you may need advice. Full legal advice should be taken from a qualified professional when dealing with specific situations. -
Negotiating Contractual Indemnity in M&A Deals
Presenting a live 90-minute webinar with interactive Q&A Negotiating Contractual Indemnity in M&A Deals: Transactional and Litigation Considerations Structuring Terms to Minimize Financial Risks THURSDAY, AUGUST 24, 2017 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Frank C. Koranda, Jr., Partner, Polsinelli, Kansas City, Mo. Jessica C. Pearlman, Partner, K&L Gates, Seattle Lisa R. Stark, Partner, K&L Gates, Wilmington, Del. The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10. Tips for Optimal Quality FOR LIVE EVENT ONLY Sound Quality If you are listening via your computer speakers, please note that the quality of your sound will vary depending on the speed and quality of your internet connection. If the sound quality is not satisfactory, you may listen via the phone: dial 1-888-450-9970 and enter your PIN when prompted. Otherwise, please send us a chat or e-mail [email protected] immediately so we can address the problem. If you dialed in and have any difficulties during the call, press *0 for assistance. Viewing Quality To maximize your screen, press the F11 key on your keyboard. To exit full screen, press the F11 key again. Continuing Education Credits FOR LIVE EVENT ONLY In order for us to process your continuing education credit, you must confirm your participation in this webinar by completing and submitting the Attendance Affirmation/Evaluation after the webinar. -
Ratings Reform: the Good, the Bad, and the Ugly
Columbia Law School Scholarship Archive Faculty Scholarship Faculty Publications 2011 Ratings Reform: The Good, the Bad, and the Ugly John C. Coffee Jr. Columbia Law School, [email protected] Follow this and additional works at: https://scholarship.law.columbia.edu/faculty_scholarship Part of the Banking and Finance Law Commons, and the Law and Economics Commons Recommended Citation John C. Coffee Jr., Ratings Reform: The Good, the Bad, and the Ugly, 1 HARV. BUS. L. REV. 231 (2011). Available at: https://scholarship.law.columbia.edu/faculty_scholarship/615 This Article is brought to you for free and open access by the Faculty Publications at Scholarship Archive. It has been accepted for inclusion in Faculty Scholarship by an authorized administrator of Scholarship Archive. For more information, please contact [email protected]. RATINGS REFORM: THE GOOD, THE BAD, AND THE UGLY JOHN C. COFFEE, JR.* Although dissatisfaction with the performance of the credit rating agencies is universal (particularlywith regard to structuredfinance), reformers divide into two basic camps: (1) those who see the "issuer pays" model of the major credit ratings firms as the fundamental cause of inflated ratings, and (2) those who view the licensing power given to credit ratings agencies by regulatory rules requiring an investment grade ratingfrom an NRSRO rating agency as creating a de facto monopoly that precludes competition. After reviewing the recent em- pirical literature on how ratings became inflated, this Article agrees with the former school and doubts that serious reform is possible unless the conflicts of interest inherent in the "issuer pays model" can be reduced.Although the licens- ing power hypothesis can explain the contemporary lack of competition in the ratings industry, increasedcompetition is more likely to aggravate than alleviate the problem of inflated ratings. -
Factoring Turn Your Accounts Receivable Into Immediate Cash
Factoring Turn your accounts receivable into immediate cash 1 What is Factoring? 3 The 3 "S" How beneficial is it for my business? 5 Is it for me? 5 Save time & money Streamline cash flow I already have the facilities required, so why team up with a Factor? 7 Secure cash collection Do you really know my customers better than I do? 7 Are my customers in safe hands? 9 What happens if a client does not pay? 9 What is the price to pay? 11 How do I pay? 11 Why Factoring with Creditbank? 13 Cash in and step up your business Why wait for your accounts What is Factoring? to turn into cash? Factoring is the key to turn your business into a • Factoring is a financial service based on a trade operation where the seller of goods or services known as the Client, assigns all his accounts receivable (i.e. well-oiled machine. invoices or trade bills) to a Factor. These accounts receivable are generated from transactions between the Client and his Customers. • Factoring allows you to turn your accounts receivable into immediate cash. • Factoring helps you to streamline your business cash flow. • Factoring allows you to focus fully on the core of your business. • Factoring is not a loan. It is the sale of an asset- in this case, the invoice. It does not create liability on the balance sheet or encumber assets in case of non-recourse factoring. 2 3 Secure cash collection and optimize time management to make your business more efficient How beneficial is it for my business? • Unlike a commercial facility or a loan, Factoring requires no collateral. -
Incentive Stock Options May Not Be All That They Seem
Incentive Stock Options May Not Be All That They Seem Equity is an important compensation tool for employers to create alignment, incentivize performance, build long-term value, and control the cash cost of compensation. There are several types of equity compensation arrangements, each with different economic and tax attributes that can influence how and when they are used. Depending on the situation, some arrangements can favor the employer over the employee, and some the employee over the employer. The tax implications of incentive stock options (ISOs) can vary dramatically depending on how and when an employee exercises and monetizes an award. Once a popular equity compensation arrangement, ISOs have decreased in relative popularity since the early 2000s in favor of restricted stock arrangements and non-statutory stock options (NSOs). However, in today’s market ISOs are increasingly being utilized by venture or private equity-backed private companies. With this rise in use, it is important to understand the complexities and issues faced by employees exercising and monetizing ISOs in today’s acquisition-focused environment. Potential Benefits The tax treatment of an ISO is typically beneficial to an employee relative to other equity compensation arrangements. Unlike ISOs, both NSOs upon exercise and restricted stock arrangements upon vesting generally create taxable compensation to the employee subject to income tax, social security and Medicare tax withholding. Conversely, with ISOs there is no taxable compensation to the employee provided that the employee holds the shares received upon exercise for at least two years after grant and one year after exercise. Employees meeting the above requirements are taxed at federal long-term capital gains rates (generally 23.8% including the net investment income tax) when the shares are monetized after being held for more than one year. -
A Guide to 'What Is Factoring?'
A GUIDE TO ‘WHAT IS FACTORING?’ What is Factoring? Factoring, or sometimes referred to as Invoice discounting, is a commonly used financing tool for small business. When a small company sells its goods or services, it generally offers payment terms to its customers rather than require cash at the time of sale. There are many sound reasons for this business practice; including increasing sales and developing long-term relationships. When such a transaction takes place, the business is left with an account receivable which it holds on its books until the customer pays it turns into cash. What is a Factoring Company? A factoring company specializes in invoice financing for small to medium businesses that are non-bankable, offering working capital solutions. Typically, a factoring company buys your invoices from a creditworthy client. After this, they will advance you up to 90% of the invoice amount immediately and will give the remaining balance when your clients settle in full. You may submit Invoices for factoring directly upon completion of work or product delivery. Revenue flows directly and instantly to you with no delays or collection hassles. The better, more experienced factoring companies often non-recourse factoring, assuming credit risk and responsibility for client payment. What Are the Benefits of Invoice Factoring? • CASH IN YOUR HANDS IN AS LITTLE AS 24 HOURS • UP TO 90% ADVANCED ON YOUR INVOICES • THE FACTOR BECOMES YOUR CREDIT DEPARTMENT • PAYROLL FUNDING • IRS ISSUES AND LIENS CAN OFTEN BE A NON-FACTOR • PRE-APPROVE YOUR CLIENT’S CREDIT • 25 YEARS SERVICING INDUSTRIES OF ALL KINDS What is the Factoring Process? The factoring process is very straightforward. -
The Economics of Deferral and Clawback Requirements∗
The economics of deferral and clawback requirements∗ Florian Hoffmanny Roman Inderstz Marcus Oppx June 2, 2021 Abstract We analyze the effects of regulatory interference in compensation contracts, fo- cusing on recent mandatory deferral and clawback requirements restricting incen- tive compensation of material risk-takers in the financial sector. Moderate deferral requirements have a robustly positive effect on equilibrium risk-management effort only if the bank manager's outside option is sufficiently high, else, their effectiveness depends on the dynamics of information arrival. Stringent deferral requirements unambiguously backfire. We characterize when regulators should not impose any deferral regulation at all, when it can achieve second-best welfare, when additional clawback requirements are of value, and highlight the interaction with capital reg- ulation. Keywords: compensation regulation, clawbacks, bonus deferral, short-termism, moral hazard, principal-agent models with externalities. JEL Classification: D86 (Economics of Contract: Theory), G28 (Government Pol- icy and Regulation), G21 (Banks, Depository Institutions, Mortgages). ∗This paper benefited significantly from comments by the co-editor Philip Bond, an anonymous associate editor, and, two anonymous referees. We also thank Vish Viswanathan, Elu von Thadden, and Mark Westerfield for excellent discussions, as well as Yakov Amihud, Peter DeMarzo, Alex Edmans, Sivan Frenkel, Willie Fuchs, Nicolae Garle^anu, Ben H´ebert, Gustavo Manso, John Morgan, Andrzej (Andy) Skrzypacz, Jan Starmans, Steve Tadelis, Jean Tirole, and Jeffrey Zwiebel for valuable insights. We are also grateful for comments from seminar participants at Stanford, University of Washington (Seattle), Tel Aviv University, Washington University Corporate Finance conference, FTG Madrid, Barcelona GSE, the Paul Woolley Centre Conference at LSE, the conference in honor of Doug Diamond at the University of Chicago, and the Stockholm School of Economics. -
Assignment of Receivables in Financing Transactions
Article Assignment of receivables in financing transactions Truly a sale or funding in disguise? Anita Baid Finserv [email protected] 03.01.2018 Check at: http://vinodkothari.com/staff- publications.html for more write ups. Copyright: This write up is the property of Vinod Kothari Consultants P. Ltd and no part of it can be copied, reproduced or distributed in any manner. Disclaimer: This write up is intended to initiate academic debate on a pertinent question. It is not intended to be a professional advice and should not be relied upon for real life facts. Assignment of receivables in financing transactions Article Introduction In legal interpretation, whether a document, manifestly reading like a transfer agreement, has the true effect of transferring an asset or merely leading to a disguised funding transaction, is always a matter of dispute before Courts. Everything is fine in good times, but the so-called sale was documented to be of help during financial distress or bankruptcy; so in distress or bankruptcy, questions are raised as to whether the purported sale is a sale or financing transaction. A number of so-called “sales” may be really garbed funding transactions, in which case a Court may re-characterise such transactions as funding transactions. If the transaction is treated as a financing transaction, the very purpose that the sale documentation tried to achieve will be frustrated. Worse still, the transaction may be regarded as unsecured funding, since security documentation may not have been done. The question of “true sale” is, therefore, a question as to whether a documented sale will be regarded as truly achieving the objective of a sale, and will be respected as such in bankruptcy or similar situation.