In today’s dynamic trade environment, preserving liquidity and reducing risk exposure are critical for corporates globally. Our non-recourse receivables finance solution, HSBC Receivables Advantage, empowers businesses to unlock immediate cash from their receivables, transforming receivables into working capital today.
Trade
HSBC Receivables Advantage
Every organization has unique needs. Wherever you do business, we have solutions to help.
Non-recourse receivables finance¹
Key Benefits
Increased liquidity
By providing immediate cash against outstanding invoices, this enables you to improve your cash flow and continue offering attractive credit terms to your customers.
Buyer payment risk protection
By transferring the credit risk to HSBC, the non-recourse structure protects you against buyer default and delayed payment without cause.
Balance sheet optimization
By structuring the transaction as a sale of receivables assets, you can achieve derecognition (subject to the judgement of your auditors) as well as improving key financial ratios such as: Free Cash Flow (FCF), Days Sales Outstanding (DSO) and Gearing.
Why choose HSBC Receivables Advantage
Improve free cash flow and mitigate your buyer credit risk with a fully scalable and streamlined Receivables Advantage facility.
Simplified solution
If needed, we can leverage our distribution capabilities to provide a one-bank receivables purchase solution provided by HSBC, offering a straightforward Receivables Purchase Agreement with up to 100% payment up front.¹Flexible and scalable
Choose from a range of pricing structures based on various criteria to help optimize costs and provide repayment flexibility with potential for scaling the offering across multiple markets.Fast turnaround
Gain access to same-day payment of eligible sales invoices, subject to conditions.Derecognition
HSBC Receivables Advantage is structured to make it easier for you to achieve derecognition of receivables, helping improve financial ratios. That is, however, a judgement for you and your auditors and the bank provides no advice or warranty for any accounting treatment.²Receivables finance expertise
Over 50 years of experience in Receivables Finance and significant experience of delivering complex and structured Receivables Purchase solutions across the globe, including multi-jurisdiction solutions, across multiple sectors.
How HSBC Receivables Advantage works
HSBC Receivables Advantage can help you to convert your receivables into cash, generating Free Cash Flow, helping enhance your financial metrics and maximize your sales by offering competitive open account credit terms.
We can protect you from buyer credit risk while you focus on your relationships and collection activity (assuming buyers are not in default).
Step 1
We will carry out our due diligence to confirm that HSBC understands your needs. We work together to establish that you can fulfill the responsibilities to sell and service the receivables. With the due diligence HSBC can then decide to offer a credit approved solution. If you chose to accept an offer, then we proceed to step 2. We will wherever possible implement at a pace that suits you.
Step 2
Sign a Receivables Purchase Agreement with HSBC – under which you will transfer ownership of relevant receivables from you to HSBC.
Step 3
HSBC takes up to 100%¹ of buyer credit risk, protecting you from late payments or buyer default/ insolvency. You remain responsible for compliance with your buyer’s supply contract (including product quality), collecting the receivable effectively and keeping HSBC informed of any issues affecting the receivables.
Step 4
Invoice your buyer as normal and forward your invoice details to HSBC.
Step 5
HSBC pays up to 100% of the invoiced value to you, typically credited within 24 hours.
Step 6
Upon maturity of the invoice, you receive payment from the buyer, which you collect on behalf of HSBC. The funds are remitted to you through your existing clearing arrangements or a dedicated account.
Step 7
You pay receipts to HSBC within an agreed period and share remittance details and account for any deductions such as credit and rebates. Upon maturity of the invoice, you receive payment from the buyer, which you collect on behalf of HSBC. The funds are remitted to you through your existing clearing arrangements or a dedicated account.
Why HSBC?
With HSBC, the world becomes a more connected place. A place where your business can growth faster and safer.
Global connectors: Our expansive network provides you with a powerful mixture of local, regional, and global knowledge to support you in your growth journey.
Innovative problem solvers: We strive to develop and deliver innovative solutions. Today, we are seeking new ways to support companies like yours expand internationally, including building new tech collaborations to reduce paper from trade, or creating new platforms to facilitate e-commerce.
Strategic partner: We are believers in forging long-term strategic partnerships with our clients including buyers and sellers across the supply chain ecosystem around the world.
Important information
1 Conditions apply. Businesses considering such financing must carefully review the terms and conditions to understand the exact scope of the non-recourse protection and any potential carve-outs.
2 Subject to your Auditors opinion. Accounting treatment applicable to a receivables finance structure varies depending upon many factors, including the attributes and behavior of the commercial parties.
The information in this content is not advice on legal, tax, investment, accounting, regulatory or other matters. You should always consult your own financial, legal, tax, accounting, or similar advisors before entering into any agreement for HSBC products or services. Products and services offered by HSBC are subject to applicable laws and regulations, as well as our service terms and policies. Not all products and services are available in all geographic areas or to all customers. In addition, eligibility for particular products and services is subject to satisfaction of applicable legal, tax, risk, credit and other due diligence.
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