1. In the process of negotiation between importers and exporters, the textile company first finds a domestic factor (as an export factor), applies for export factoring business, fills in the Application for Export Factoring Business (also called the Application for Credit Line), and applies for credit line for importers. The application generally includes the following contents: the business situation of the exporter; Transaction background information; Application amount, including currency, amount and type, etc.
2. On the same day, the domestic factor selected an import factor from the UK, and informed the import factor about the situation through the electronic data exchange system EDIFACTORING developed by the International Factoring Federation (FCI), requesting it to conduct credit evaluation on the importer. Usually, the export factor chooses the factor that has signed the agency factoring agreement with it, participated in the FCI organization and is located in the importer's place as the import factor.
3. According to the information provided, the import factor uses various information sources to investigate the credit status of the importer and the market situation of this kind of silk clothing. If the importer has a good reputation and the imported goods have a good market, the import factor will initially approve the importer's certain credit limit, and inform the China factor of the relevant information and quotation on the fifth working day. According to the international practice of FCI, the import factor should reply to the export factor within 14 working days at the latest. The domestic factor will inform the textile company to recognize the importer's credit limit and its own quotation.
4. Textile companies accept quotations from domestic factors, sign export factoring agreements with them, and formally conclude trading contracts with importers. The contract amount is USD 500,000, the payment method is O/A, and the term is 60 days after the invoice date. After signing the export factoring agreement with the textile company, the export factor formally applies for the credit line from the import factor. The import factor shall reply to the export factor on the third working day, informing it of the approved quota and validity period.
5. After the textile company delivers the goods according to the contract, it will send the original invoices, bills of lading, certificates of origin, quality inspection certificates and other documents to the importer, and send the copies of invoices and related documents to the domestic export factor (according to the requirements of the import factor). At the same time, the textile company also submitted the Notice of Creditor's Rights Transfer and the Application for Export Factoring Financing to domestic factors. The former transfers the accounts receivable of the shipped goods to domestic factors, and the latter is used to apply for financing from domestic factors. Domestic factors provide financing equivalent to 80% of the invoice amount (namely $400,000) according to the export factoring agreement.
6. On the day when the export factor receives the copies of the invoices and documents (if any), it will inform the import factor of the detailed information of the invoices and documents (if any) through the EDIFACTORING system, and the import factor will start collecting money from the importer several days before the invoice expiration date.
7. After the invoice expires, the importer pays the import factor, the import factor pays the money to the China factor, and the China factor deducts the financing principal and interest and related factoring fees, and then pays the balance to the textile company.
Tips: The above information is for reference only.
Reply time: 202 1- 12-23. Please refer to the latest business changes announced by Ping An Bank in official website.