Definition

Synopsis of SCF techniques

The following table is provided as a simplified summary of the SCF techniques to provide a quick and convenient overview. It categorises all techniques described in this document against characteristics the reader may find useful when judging which technique may be most appropriate for the respective individual need.

The categorisation of the techniques in the table is based on best estimates at the time of publication.

The reason for classification into a given category may result from commercial, legal, operational, technical or any other circumstances that are not further elaborated in this section, as its primary intention is to condense the detailed information provided in the preceding section.

Within the characteristics offered, the techniques are classified along a scale ranging from ‘never’ to ‘always’, including the option of not being applicable:

Rating	N.A.	Never	Almost never	Rarely	Sometimes	Often	Almost always	Always
Probability	0%	0%	10%	25%	50%	75%	90%	100%
Within the characteristics offered, the techniques are classified along a scale ranging from ‘never’ to ‘always’, including the option of not being applicable

The probabilities shown in this table are indications only and may vary depending on the particular constellation of buyer, seller and involved service provider. Particularly the accounting of a technique depends on the individual context and how it is classified by the respective auditor of the involved legal entity.

The table should hence be used as a primary indicator, providing a first orientation and direction to the reader. In order to validate whether a specific SCF technique applies to a respective need, it is recommended to read the detailed technique description or further material quoted in this document and thereafter to seek expert advice as appropriate.

N.A.’ in the commercial section relates to the fact that only one party (buyer or seller) can be the lead party / main client, while the respective seller / buyer in the same arrangement can only be the counterparty who may act upon invitation or not not be involved at all.

3rd Party Distribution’ relates to bank-led distribution, i.e. SCF business originated by a bank.

		Receivables Purchase-based
Aspects		Receivables Discounting	Forfaiting	Factoring	Payables Finance
Commercial	Large Volume	Often	Rarely	Often	Often
	Large Value	Often	Often	Rarely	Sometimes
	Low Volume	Sometimes	Often	Rarely	Sometimes
	Low Value	Sometimes	Rarely	Often	Sometimes
	Large Corporate Buyer	N.A.	N.A.	N.A.	Almost always
	Large Corporate Seller	Often	Often	Sometimes	N.A.
	SME Buyer	N.A.	N.A.	N.A.	Almost never
	SME Seller	Rarely	Rarely	Often	N.A.
	Target Group (Buyer / Seller)	Seller	Seller	Seller	Buyer
Finance	100% Financing	Often	Often	Rarely	Almost always
	Committed Facility	Rarely	Rarely	Rarely	Rarely
	3rd Party Distribution (funded)	Often	Sometimes	Sometimes	Sometimes
	3rd Party Distribution (unfunded)	Sometimes	Sometimes	Sometimes	Rarely
	Credit-enhanced / insured	Often	Sometimes	Sometimes	Almost never
	Off-Balance Sheet	Almost always	Always	Almost always	Almost always
Legal	Loan-based	Never	Rarely	Almost never	Almost never
	Purchase-based	Always	Often	Almost always	Almost always
	Disclosed	Sometimes	Often	Often	Always
	Undisclosed	Sometimes	Rarely	Rarely	Never
	With full recourse	Rarely	Rarely	Rarely	Never
	Without / with limited recourse	Often	Often	Often	Always

		Advanced Payable
Aspects		Corporate Payment Undertaking	Dynamic Discounting	Bank Payment Undertaking
Commercial	Large Volume	Often	Often	Sometimes
	Large Value	Sometimes	Rarely	Sometimes
	Low Volume	Rarely	Rarely	Sometimes
	Low Value	Sometimes	Sometimes	Rarely
	Large Corporate Buyer	Often	Often	Often
	Large Corporate Seller	N.A.	N.A.	Sometimes
	SME Buyer	Rarely	Rarely	Rarely
	SME Seller	N.A.	N.A.	Sometimes
	Target Group (Buyer / Seller)	Buyer	Buyer	Buyer
Finance	100% Financing	Often	N.A.	Often
	Committed Facility	Rarely	N.A.	Rarely
	3rd Party Distribution (funded)	Rarely	N.A.	Rarely
	3rd Party Distribution (unfunded)	Almost never	N.A.	Almost never
	Credit-enhanced / insured	Sometimes	N.A.	Often
	Off-Balance Sheet	Sometimes	N.A.	Often
Legal	Loan-based	Sometimes	N.A.	Often
	Purchase-based	Sometimes	N.A.	Rarely
	Disclosed	Always	Always	Always
	Undisclosed	Never	Never	Never
	With full recourse	Never	N.A.	Rarely
	Without / with limited recourse	Always	N.A.	Often

		Loan/advance-based
Aspects		Loans against receivables	Distributor Finance	Inventory Finance	Pre- Shipment Finance
Commercial	Large Volume	Sometimes	Sometimes	Sometimes	Sometimes
	Large Value	Sometimes	Sometimes	Sometimes	Sometimes
	Low Volume	Often	Sometimes	Sometimes	Sometimes
	Low Value	Often	Sometimes	Sometimes	Sometimes
	Large Corporate Buyer	N.A.	Rarely	Rarely	Rarely
	Large Corporate Seller	Rarely	Always	N.A.	N.A.
	SME Buyer	N.A.	Sometimes	Sometimes	Often
	SME Seller	Often	Never	N.A.	N.A.
	Target Group (Buyer / Seller)	Seller	Seller	Both	Seller
Finance	100% Financing	Rarely	Rarely	Rarely	Rarely
	Committed Facility	Rarely	Rarely	Rarely	Rarely
	3rd Party Distribution (funded)	Rarely	Sometimes	Rarely	Rarely
	3rd Party Distribution (unfunded)	Sometimes	Sometimes	Sometimes	Sometimes
	Credit-enhanced / insured	Rarely	Rarely	Often	Rarely
	Off-Balance Sheet	Never	Rarely	Rarely	Never
Legal	Loan-based	Always	Often	Often	Always
	Purchase-based	Never	Rarely	Rarely	Never
	Disclosed	Sometimes	Always	N.A.	N.A.
	Undisclosed	Sometimes	Never	N.A.	N.A.
	With full recourse	Always	Never	Often	Always
	Without / with limited recourse	Never	Always	Rarely	Never

RECEIVABLES PURCHASE

ADVANCED PAYABLES

LOANS

ADDITIONAL RESOURCES

Synopsis of SCF techniques

Definition

Synopsis of SCF techniques