Our flexible receivables finance programmes enable multinational companies to release cash locked in their global debtor books with the potential for off-balance sheet accounting treatment. Our technology platform, combined with professional structuring, minimizes risk for our funding partners while enabling our clients to achieve optimal advance rates and the lowest cost of funds.
The global receivables finance market is worth over $4tr and companies are increasingly turning to it to fund their growth and manage their working capital. Financing receivables via traditional and alternative investors has never been such an important tool in working capital management.
There are multiple products available, from invoice discounting and factoring suitable for smaller companies to receivables securitisation and asset-backed loan programs suitable for larger firms. DEMICA focuses on clients requiring $25m to $750m of funding and fits the structure to our clients' circumstances.
The DEMICA Advantage
Receivables Finance FAQs
Demica works globally. Currently we have clients based in over 30 countries and we are facilitating the funding of receivables from 130 countries.
Yes. The most complex program to date involved a client with subsidiaries in 20 countries, customers in 28 countries and receivables in 17 currencies.
We recognize the importance to clients that we can commit to providing funding as a principal. Following the change of ownership in August 2014, DEMICA has access to proprietary pools of capital, which we can deploy for our clients, or we can provide access to our bank and institutional investor partners on an agency, syndicated or risk participation basis.
Mezzanine in the context of receivables finance is typically a subordinated funding tranche with a different risk exposure than the Senior funding component. Placement of the Mezzanine tranche can improve the advance rate received on a programme. Basel III banking regulations will make this increasingly relevant to clients.
DEMICA partners with 35 bank and non-bank funders. This privileged whole of market position, along with our risk mitigation tools, means we are likely to deliver funds at a lower cost of capital than most of our clients can access on their own.
Our programs usually lie in the $25m to $750m range. Below $25m it is often better for the client to work with a regional bank or independent factoring firm.
This is dependent on the required tenor of the programme, the required advance rate, the quality of the receivables and the performance risk of the client that is acting as Servicer.
Advance rates are determined by performance and identified risk parameters of the pool of receivables, and may also take in account FX and cash control.
Programs are usually structured as 1-, 3-, or 5-year terms.
Supply chain finance
Our innovative supply chain finance solutions enable our clients to extend days payable outstanding, capture early payment discounts offered by suppliers or help their suppliers secure lower cost funding, all while improving their own margins. We specialize in non-investment grade programmes and those that operate cross-border.FIND OUT MORE