What does a factoring company do?

Factoring companies are financial institutions that provide factoring services. Business scope of factoring company: Factoring business is a comprehensive financial service integrating trade financing, business credit investigation, accounts receivable management and credit risk taking.

Precautions for factoring companies:

(1) The buyer (importer) must have a good reputation or credit, and let the import factor verify a certain credit limit for it, otherwise it will not be accepted.

(2) Before continuing the factoring business, and before signing the export contract formally, we should do a lot of work such as application, credit evaluation and credit line verification.

(3) Only after the export factor and the exporter have agreed to handle the factoring business, that is, the export factor has approved the credit line for the importer, can the foreign trade contract be formally signed or the goods be shipped.

(4) Pay attention to the usage of the importer's credit line (balance status) and the changes of its credit status. Always keep effective communication with export agents.