1. The concept of factoring:
International factoring is a commercial financing method, involving three parties: exporters (sellers), importers (buyers) and factoring companies. Exporters sell their accounts receivable to factoring companies to obtain cash flow, and factoring companies are responsible for collecting accounts from importers.
2. The purpose of international factoring:
International factoring aims to provide liquidity support for exporters and reduce transaction risks. Exporters can get cash immediately after the transaction is completed, without waiting for the buyer to pay. In addition, the factoring company also bears part of the credit risk, reducing the risk burden of exporters.
3. The operation process of international factoring:
The operation process of international factoring includes the following key steps: the exporter signs a factoring contract with the factoring company, the exporter sells the accounts receivable to the factoring company, and the factoring company provides funds to the exporter; The factoring company sends an account notice to the importer, asking him to pay the money directly to the factoring company; The importer pays the account to the factoring company, and the factoring company pays the due amount to the exporter.
4. Forms of international factoring:
International factoring can be divided into two forms: recourse factoring and non-recourse factoring. Recourse factoring means that if the buyer fails to pay within the time limit, the factoring company has the right to recover the payment from the exporter and bear certain default risks. Non-recourse factoring means that the factoring company bears all or part of the risks of the accounts that the buyer does not pay, and the exporter does not need to return the money to the factoring company.
5. Advantages of international factoring:
International factoring provides a series of advantages for exporters and importers. For exporters, international factoring can collect accounts in advance, reduce the pressure of cash flow and reduce the risk of bad debts. For importers, international factoring can extend the payment period and improve the flexibility of procurement.
6. Scope of application of international factoring:
International factoring is widely used in various industries and international trade, especially for small and medium-sized enterprises and exporters in emerging markets, which can provide trade financing support and promote the development of international trade.
Summary:
International factoring is an international trade financing method that transfers accounts receivable to financial institutions through factoring companies to obtain financial support. It provides cash liquidity support for exporters, reduces transaction risks and provides flexible payment terms for importers.
International factoring has played an important role in international trade and played an active role in promoting trade development and providing financing support.