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 future inflows into working capital today.
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 optimisation¹
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 flow1 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.²Flexible and scalable solution
Choose from a range of pricing structures based on various criteria to help optimise 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 particular accounting treatment.¹Receivables 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 and minimising DSO, helping enhance your financial metrics and maximise 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 fulfil 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%² 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%² 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 credits and rebates.
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’re 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 Subject to your Auditors opinion. Accounting treatment applicable to a receivables finance structure varies depending upon many factors, including the attributes and behaviour of the commercial parties. You are responsible for obtaining your own professional accounting, tax, legal and other professional advice prior to the implementation of any trade, supply chain finance or receivables finance structure.
2 Conditions apply
Disclaimer: The recipient is solely responsible for making its own independent investigation and appraisal of the risks, benefits and suitability to and for it of the content and/or any products, investments and transactions referred to, and access to this content shall not be regarded as creating any form of advisory or other relationship. HSBC is not responsible for providing the recipient with any general financial, strategic or other specialist or technical advice, including legal, tax, financial modelling, regulatory, investment, accountancy or audit advice, and the recipient should make its own arrangements accordingly. This content is for information purposes only and does not constitute or form any part of any (i) invitation or inducement to engage in investment activity, (ii) offer, solicitation or invitation by HSBC or any of its directors, officers, employees or agents for the sale or purchase of any securities or other investments or (iii) commitment to underwrite, purchase or subscribe for any securities.
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Need help?
For more information, please contact your HSBC representative.