Benefits of Account Receivables Purchase

• Stronger balance sheet structure
• Better management of assets
• Alternative way of raising funds
• Can enhance earnings by enabling proceeds to be reinvested into productive assets
• May assist with problems of capitalisation without recourse
• Differs from factoring in that the relationship between the corporate and debtor is maintained
• Relatively simple to administer and operate

Structure

1. Seller and SMBC enter into a Purchase Agreement
2. SMBC purchases receivables periodically from Seller and pays cash
3. Seller continue to collect receivables from the Obligor as the Servicer
4. Seller reports to SMBC on collection from time to time