Structured financing
“Structured financing“ is a financial product created out of a combination of different basic
financial products. This group includes certificates and equity-linked bonds, for example,
different factoring solutions and improper pension business. An independent product is produced out
of this combination of different requirements with a separate financial behaviour and risk profile.
It can also differ immensely from a taxation perspective.
These products aim at the following objectives:
- Fulfilment of individual customer requests
- Increase in the profit margins of the issuer
- Better consultancy possibilities for the bank towards customers
- Tax advantages for customers (e.g. avoidance of tax on speculative gains or a capital guarantee that is not 100 percent)
- Closing of product loopholes
- Advertising for the issuer
Good to know
Factoring involves sales and not credit. It describes the continuous purchase of short term, future claims form the supply of goods and services as well as their management, accounts receivable accounting, dunning and collection system.