Factoring, also referred to as the purchase of accounts receivable , is a financing service that the factor (the bank) purchases the trade debts of its clients and collects them on its own behalf.

International Factoring

Service Description

The bank buys your accounts receivable in the form of invoices and due from the buyer/importer, and therefore takes the charge of the credit control in the sales, the maintenance of the sales ledger, the collection of the receivables and the protection for the bad debts.

At present, we only offer our clients with export factoring.

Features

Export factoring can help the exporter to increase sales, obtain payment protection, simplify transaction, reduce costs and maximize profit.

Business Handling

•  The exporter presents a list of overseas importers and related documents, indicating the transaction amount of each importer.

•  The bank reviews the credit status of each importer and notifies the exporter the results.

•  A factoring agreement is signed between the exporter and the bank.

•  The exporter delivers goods and sends the bank invoices together with the Assignment of Accounts Receivable Advice to apply for a credit up to 60%-90% of the total trade price.

•  The bank collects all the accounts upon due. And, after the deduction of the principal and interest of the credit and the commission fee, transfers the residual to the exporter.

•  If the importer is insolvent, the factor (the bank) should indemnify the exporter the account receivable within 90 days after due.

Domestic Factoring

Service Description

Domestic factoring is a contractual relationship between the supplier and the factor. According to the contract, the supplier assigns its accounts receivable arising from the sales of goods prescribed in the sales contract signed between the supplier and his buyer to the factor, to obtain services as trade finance, sales ledger, debts call-in, credit control in the sales and bad debts protection.

We offer a wide range of domestic factoring services to meet the clients' various demands:

Comprehensive factoring with recourse : factoring service with recourse that provides services as maintenance of sales ledger, accounts receivable call-in and trade finance.

Commercial bills discount : factoring service with recourse that provides trade finance.

Full factoring : factoring service without recourse that provides trade finance, sales ledger, debts call-in, credit control in the sales and bad debts protection.

Features

The supplier/seller may enjoy the following benefits:

•  Attractable payment option, payment against open account, to strengthen his/her competitiveness, to brings about more purchase order and to boost profits.

•  Post- shipment finance up to 80% of the total price, shortening the withdrawal period and accelerating the funds circulation.

•  Effective risk control, avoiding the interest loss incurred by deferred payment and the bad debts due to the bankruptcy of the buyer.

•  Low costs. The supplier can investigate the buyer's credit through the extensive network of the factor to reduce costs. Also the buyer may incorporate related costs into the commodity price.

•  Simple procedure, which enable the supplier to deliver commodities according to the buyer's demands and the transport conditions.

The buyer can also take advantage of the following benefits:

•  Increasing purchase by OA or D/P.

•  Simplifying business procedure. Picking up goods upon the receipt of the documents and putting in the market in correspondence to the market needs, exempted from the necessity of large stock.

•  Acquiring unsecured credit from the factor against his/her good reputation and fine financial performance.

Business Handling

•  A factoring agreement is signed between the supplier and the bank.

•  The supplier delivers goods and presents the bank commercial bills together with the assignment documents to apply for a credit up to 80% of the total transaction price.

•  The bank collects all the accounts upon due. And, after the deduction of the principal and interest of the credit and the commission fee, transfers the residual to the supplier.

•  Under the factoring without recourse, the factor (the bank) undertakes the obligations arising from the insolvency of the buyer.