Loss Factoring

The handling and settlement of complex insurance claims with the involved insurers may go on for several months or longer. As a result of this the affected company can be driven into an existential endangering liquidity squeeze. In such cases, the Loss Factoring represents a good option for the assurance of liquidity and the achievement of the company goals. By Loss Factoring, there exists the possibility to substantiate booked costs/revenues as accruals within the balance sheet at the end of the fiscal year.

The Loss Factoring is an effective way to improve the cash flow situation short-termly for companies that are situated in restructuring or insolvency situations.

Each insurance claim is to be evaluated individually to decide whether and which type of the Loss Factoring is feasible.

The principle of the Loss Factoring in this stage is based on the assessment whether the company has unsettled and valuable insurance claims. Loss Factoring is an effective approach, if the company has not the temporal and/or professional capacities to achieve a payment through the usual settlement process for the insurance claims.
In these cases, the companies transfer their insurance claims to the factoring provider, as for the invoice factoring, and receive in return a payment with risk discount.

  • Transfer of the complete claim against lump-sum payment
  • „Earn-Out-Modell“– Lump-sum payment based on the minimum expectation; additional revenues are shared according to a previously defined splitting scheme
  • Mortgaging of the insurance claims, reimbursement with payment by the insurer
  • “Light-model”: no factoring, but settlement of the insurance claims upon pure fee basis
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