BBVA’s tailored receivables finance solutions

In today's environment, liquidity and capital efficiency are critical differentiators. Companies with optimized working capital structures not only secure resilience in volatile markets but are better positioned to generate superior returns for their shareholders. A powerful tool to achieve this is receivables finance.

---

Evidence shows that companies that have been able to reduce their cash conversion cycle, have achieved higher returns on invested capital and delivered greater shareholder value. By unlocking cash tied up in receivables, firms can fund growth, reduce leverage, and mitigate risk.

At BBVA, we offer a comprehensive range of receivables finance solutions designed to meet the unique needs of our clients according to their receivables portfolio profile.

1. Factoring / Invoice Discounting

Factoring, also known as invoice discounting, represents the simplest and most direct structure within receivables finance. It is based on the true sale of receivables, where BBVA purchases a portfolio of outstanding receivables from the client, providing immediate liquidity.

This product is particularly suited to concentrated portfolios, often dominated by a few large buyers. BBVA conducts an individual buyer credit analysis and the financing capacity is determined by the bank's credit appetite for each specific buyer.

Factoring transactions are limited-recourse to the seller of the receivables, meaning BBVA assumes the insolvency risk of the approved buyers. Pricing is driven by the individual credit quality of each buyer, reflecting both the risk profile and the tenor of the receivables. Because these facilities rely on BBVA's own credit limits, they are typically available only for well-rated buyers that are clients of the bank, which naturally limits the eligible pool.

While the financed portfolio may be smaller due to the exclusion of lower-rated buyers, factoring remains an operationally simple solution for companies seeking to unlock liquidity and transfer credit risk without extensive setup or monitoring requirements.

2. Credit-Insured Receivables Purchase Programs

For companies with medium-sized portfolios and moderate concentration levels, BBVA's Credit-Insured Purchase Programs offer a highly effective alternative. It follows the same true sale structure as factoring but introduces a credit insurance enhancement, which broadens the range of eligible buyers.

By leveraging the insurer's risk coverage, BBVA can absorb exposures to non-investment-grade buyers, increasing the proportion of receivables that qualify for financing. The insurance policy serves as credit enhancement, enabling capital relief and therefore competitive pricing while maintaining robust protection against buyer default.

This product is particularly suited to clients seeking to expand liquidity across a broader customer base, including buyers not covered under standard bank limits. It strikes the optimal balance between flexibility, pricing, and risk management, while retaining operational simplicity.

3. Receivables Securitization

At the most sophisticated end of BBVA's offering, Receivables Securitization is tailored for large, diversified portfolios that include hundreds of buyers. This structure incorporates additional credit protections such as reserves and overcollateralization to absorb potential losses, as well as performance triggers, such as delinquency, dilution, or default ratios, to monitor portfolio quality over time. 

While securitization involves greater operational and reporting complexity, it typically offers the most competitive pricing due to the enhancements and risk diversification inherent in the structure.

This product is particularly attractive for corporates seeking a long-term and scalable funding platform.

Driving Value Through Working Capital Efficiency

From single-buyer factoring to large-scale securitizations, BBVA's receivables finance solutions are designed to help clients unlock liquidity, mitigate risk, and optimize working capital. 

These structures are particularly attractive to companies as they do not consume the client’s own credit limits and allow them to leverage the strength of their counterparties’ credit profiles and available credit enhancements to achieve competitive pricing

With centralized funding capabilities across multiple currencies and a strong balance sheet, BBVA is an ideal partner, able to deliver scalable, competitively priced solutions tailored to  global receivables portfolios.