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Silent Factoring and related risks

Silent Factoring in Switzerland Silent Factoring in Germany
Description of the product
  • The invoice is ceded and sold to Advanon
  • A bank account is set up by the seller and ceded to Advanon.
  • Advanon has PoA to withdraw incoming payments form this account
  • Seller informs the debtor that invoice is payable to this shared account without informing him about the sale of the invoice
  • The invoice is ceded to Advanon
  • A Wirecard (bank) account is set up which belongs to Advanon but carries the name of the seller
  • Seller informs the debtor that invoice is payable to this shared account without informing him about the sale of the invoice
Legal claims
  • There is a legal claim against the debtors based on the respective invoice
  • There is a legal claim against the debtors based on the respective invoice
Credit Risks
  • The credit risk lies with the debtors.
  • The credit risk lies with the debtors.
Fraud Risk
  • Falsification of an invoice: The invoice seller may sell an invoice for which he has not supplied goods or services of the same value.
  • After selling the invoice, the invoice seller can instruct the debtor to make payment to a different bank account than the one specified on the invoice
  • Falsification of an invoice: The invoice seller may sell an invoice for which he has not supplied goods or services of the same value.
  • After selling the invoice, the invoice seller can instruct the debtor to make payment to a different bank account than the one specified on the invoice
Operational Risk
  • Whilst the contract forbids the seller to withdraw money from the shared account, it is technically still possible as the account belongs to the seller
  • Also forbidden but possible: Seller can withdraw PoA for Advanon to this account
  • In case of seller default the account would be frozen until we can prove our claim on the invoice
  • Default of seller: as the account belongs to the seller, the money in it is frozen in case of default – lengthy process to prove that the invoice belongs to Advanon.
  • Limited as we control accounts belonging to Wirecard and these accounts cannot be frozen
Updated on January 14, 2020

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