What is the factoring loan in the prospectus of listed companies?

Factoring is a financial service. In factoring business, the seller transfers its current or future accounts receivable to the factor (financial institution providing factoring services) according to the goods sales/service contract signed with the buyer, and the factor provides at least the following two services:

-Trade financing

According to the seller's capital demand, the factor can provide financing to the seller immediately after receiving the transferred accounts receivable to help the seller solve the problem of liquidity shortage.

-Sales ledger management

According to the requirements of the seller, the factor can regularly provide the seller with the collection of accounts receivable, overdue accounts, aging analysis, etc. , and send various reports to assist sellers in sales management.

-Collection of accounts receivable

The factor has professionals engaged in collection work, and they will take reasonable, powerful and economical measures according to the overdue time of accounts receivable to assist the seller to collect accounts safely.

-Credit risk control and bad debt guarantee

The factor can verify the credit line for the buyer according to the seller's demand, and provide 100% bad debt guarantee for the accounts receivable generated by the seller's delivery within the credit line.

According to the introduction of factoring, factoring loan should refer to the bank loan obtained by the seller transferring its accounts receivable to the factor (here it should be a bank), which is simply accounts receivable financing to solve the problem of liquidity shortage of listed companies.