Usually, in the credit sales mode, after the seller delivers the documents according to the contract or order, it can only passively wait for the buyer to pay when it expires. Because credit sales are cash on delivery by remittance and belong to commercial credit, unlike letters of credit, banks bear the main responsibility for payment. For various reasons, some buyers may delay payment again and again, while some sellers may never pay unless the buyer's reputation is reliable or one of the two parties is a subsidiary of the other.
If the exporter and the factor sign an agreement, the situation will change fundamentally. The factor will be responsible for investigating the buyer's credit standing, providing risk guarantee, collecting accounts for exporters and carrying out relevant account management and financing to relieve the seller's worries. At the same time, capital occupation is also a prominent problem, and credit sales will make exporters' funds be occupied by accounts receivable. International factoring is a special financial tool for export credit sales, which can enable enterprises to avoid the negative impact of credit sales to the greatest extent while obtaining the benefits of credit sales, so as to achieve the goal of maximizing corporate profits.
1968, Factor Chain International was established in the Netherlands with its headquarters in Amsterdam. It is a global factoring company alliance, affiliated to1more than 20 banks. Its purpose is to provide members with uniform standards, procedures, legal basis and technical advice for international factoring services, and to be responsible for organization, coordination and technical training. At present, the International Factoring Federation can provide domestic or international factoring services to nearly 50 countries and regions such as France, Germany, Hong Kong, Italy, Japan, Singapore, Britain and the United States.
Since 1990s, the International Factoring Federation has maintained a good cooperative relationship with China. 1992 March 14, Bank of China Beijing Branch signed factoring agreements with American National Factoring Company and Gryphon Factoring Company under Bank of Milan, UK, respectively, and took the lead in developing international factoring business. 1In March, 1993, Bank of China formally joined the International Factoring Federation.
1in may, 1994, all the factoring alliances started the new EDI (electronic data interchange) communication system EDIFACToring. It is based on the United Nations standard for electronic data interchange for administration, commerce and transport, which is a truly universal electronic data interchange standard supported and developed by the United Nations.
operating procedure
Export factoring generally adopts double factoring mechanism. The exporter only needs to contact the local export factor for export sales. The export factor keeps in touch with the import factor of each importing country, and all business transactions are bound by the rules of international factoring practices promulgated by the International Factoring Federation. The importer's accounts receivable are transferred from the export factor to the corresponding import factor, and the import factor is responsible for the collection and risk guarantee stipulated in the factoring agreement to the export factor.
Export factoring usually adopts dual factoring mechanism, including the following four parties:
Exporter (your company)
importer
Export factors (assuming Bank of Communications)
Import factor
application document
The following documents are required between the exporter and the export factor:
Export factoring agreement