Factor Requirements

Factor lending terms include:

Selection Criteria

When selecting a factoring company SME Bank uses the following criteria:

Organizational criteria:

  • legal entities registered in compliance with the RF legislation;
  • absence of negative information with regards to the business reputation of both the Factor and its participants (shareholders) and management;
  • absence of sanctions on the part of supervisory and regulating authorities in the form of license suspension, prohibition to perform certain operations, in the cases where a license or permit is required in accordance with the applicable legislation.

Financial criteria:

  • fully formed authorized capital;
  • positive value of equity capital and net assets;
  • absence of litigations between the factoring company and state authorities, state entities, taxation and supervisory authorities (this covers litigations where judgments have not taken legal effect, or have taken effect but have not been fulfilled by the Factoring Company where the claimant is the Bank of Russia, the Russian Ministry of Finance, the Federal Financial Markets Service, the Federal Financial Monitoring Service, the Federal Tax Service of Russia, the Prosecutor’s Office of Russia), counteragents, where the factoring company acts as the defendant and the claims exceed 5% of its total balance;
  • absence of an unstructured defaulted debt to the budget, extra-budgetary funds and other state entities;
  • absence of losses within the last 3 closing dates leading to a net assets value decrease of more than 25% against the current accounting year maximum;
  • absence of defaulted payments with respect to the loan portfolio for the last 12 calendar months (positive credit history);
  • the amount of defaulted debt of the current factoring portfolio — under 10%.


For the Factoring Bank Credit Product

To become a member of the SME Lending Program via the Factoring Bank credit line a credit institution must have a financial standing not worse than average as determined in accordance with the internal Methodology for Assessing Financial Standing of Credit Institutions-Residents of the RF approved by the OJSC SME Bank.

Organizational criteria:

  • banking license of the Bank of Russia;
  • absence of the Bank of Russia sanctions in the form of the prohibition to perform certain banking operations and open branches, as well as in the form if suspending the license to certain banking operations , absence of unfulfilled orders of the Bank of Russia;
  • positive business reputation (absence of negative data related to reputation);
  • absence of litigations between the Factor and state authorities, state entities, taxation and supervisory agencies;
  • absence of bad credit history with the OJSC SME Bank, Vnesheconombank and other subsidiaries and related banks of Vnesheconombank.


Additionally for the Factoring Company and Factoring Bank Credit Products

  • presence of an internal mechanism and methodology governing the factoring routine, client and debtor selection procedure and assessment criteria;
  • practical experience with factoring project, including those involving SMEs.

Information on SME lending via factoring companies:

 


Sergei S. Voevodin
Deputy Director
Small and Medium Enterprise Financing Department
Tel.: +7 (495) 783-7998, extension 04-02

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