IFS Capital (M) Sdn Bhd



	As a businessman, you want your company to grow and one of the things you need is to overcome cash flow constraint. However, more often than not, your funds are tied up because you sell to your customers on credit. This could affect your plans for further investment. What you need is a steady stream of cash in-flow and to sell with confidence, without worrying about bad debts. As a financial services provider, we understand the needs of a growing business. With our wide range of financing facilities, we believe we can flourish together as partners in today's rapidly-changing business landscape. Factoring *What is Factoring?* Factoring is a form of financing that can be used by all kinds of businesses, be they traders, manufacturers or services companies. It involves an arrangement between you and IFS (M), where IFS (M) purchases your accounts receivable. Against the receivables purchased, IFS (M) will make an advance payment of up to 90%. The balance is held as a contingency reserve and refunded only after the receivables have been collected. IFS (M) takes over the task of collecting the receivables as and when they fall due and keep you informed of the status of your account through debtors ageing and payment reports, statements of account, etc. Not only does this service help our clients to increase their turnover, it also relieves them of the time-consuming tasks of sales ledgering and credit management. This factoring facility applies to both domestic and export sales. For exports, collections are normally handled by our overseas affiliates. How Can You Benefit from Factoring? With factoring, you enjoy the benefits of: A. Fast Cash Upon assigning your receivables to us, we will give you an immediate cash advance of up to 90% of the invoice value, within 24 hours. This additional working capital can go towards funding business expansion as sales growth is no longer constrained by cash flow. B. Credit Protection In non-recourse factoring, all bad debts on approved customers will be borne by us, up to the agreed limits. C. Credit Management Export credit risk management is provided by our underwriters. Through our large network of regional companies, affiliates of the International Factors Group and other credit agencies, IFS (M) has access to extensive credit information on local and overseas buyers. D. Debt Collection We take the responsibility of collecting the receivables factored to us. This means cost savings for you and, more importantly, your time and effort can be better spent building your business. E. Sales Ledger Administration We will help you to keep track of the status of your receivables, credit limit applications and other transactions, easing you more time to focus on growing your business. *How Much Does Factoring Cost?* Rates vary depending on your volume of business, the average transaction size, your customer profile, etc. Your cost of factoring is as follows :- A) Factoring charge- a service fee calculated on the total amount of invoice factored. B) Initial payment charge ("IPC") or the daily interest calculated on fund-in-use at an agreed rate per annum. Mechanism of Factoring Client performs sales contracts, delivers goods / services to customers. Copies of invoices, purchase and delivery orders are submitted by client to IFS (M). IFS (M) makes initial payment (i.e. advances cash) against the receivables. IFS (M) gives statements of account, debtors' ageing and collection reports regularly to client. IFS (M) sends monthly statements of account to customers, as well as reminders and receipts. Customers make payment to IFS (M) upon due date of invoices. Client ships goods to customers and submits invoices and shipping documents to IFS (M). IFS (M) makes initial payment to client for receivables factored and sends documents to its fellow member of the International Factors Group or a bank in the foreign country for collection. IFS (M) gives statements of account, debtors' ageing and collection reports regularly to client. Fellow member of the International Factors Group (or a bank) sends statements, reminders and receipts to customers. Customers make payment as and when bills are due. Collections are remitted to IFS (M) which will then credit clients' account. Who is Qualified? Companies / Sole-Proprietorship / Partnership with proven track records and business activities that are:- A) Capable of delivering goods and services required by customers. B) Issued with purchase orders from their customers. C) Awarded contract for commissioning and delivery of equipment. Terms Definition Acceptable Customers Government Departments and its Agencies Local Universities and Hospitals Petroleum Nasional Berhad and its Subsidiaries Tenaga Nasional Berhad and its Subsidiaries Telekom Malaysia Berhad and its Subsidiaries Malaysia Airport Berhad Banks and Financial Institutions Public Listed Companies and other accepted companies Other Financial Solutions A. Confirming Letter of Credit We offer this through the bank, usually without additional collateral from you. No collateral required. To assist in purchasing finished or completed goods on a selected basis. Available for purchases from local and overseas. Margin of finance up to 80% of contract value. B. Bank Guarantee / Performance Bond Bank Guarantee / Performance Bond is only for new contracts. A minimum advance payment of 20% from guaranteed amount. Facility is only available for performance guarantee on contract. Goverment's contract or any other customers accepted by us. C. Industrial Hire Purchase IFS can also finance your acquistion of industrial machinery and other capital assets up to 90% of the asset value, and for a tenure usually not exceeding 3 years. D. Receivables Management Services We provide this service to help you manage your receivables. We will take over your responsibility of collecting your receivables and keeping track of it in a systematic receivables report. E. Credit Guarantees We are able to bundle our services along with IFS Group which provides credit guarantees. F. Structured Finance Syndicated loans, mezzanine capital, acquisition finance and private equity finance through IFS Capital Limited. G. Alternative Finance We provide solution based financing which may include areas like : Structured lending, commodity financing and profit sharing transactions. H. Contract Financing We provide this facility selectively when our clients have firm contracts but lack funds to execute orders.