Export factoring refers to the process that you assign your immature export receivables to us, who, being an export factor, will shoulder the credit risk of your suppliers, collect and maintain the account of your receivables and even finance against the receivables assigned.

Applicability
Export factoring is suitable for your Open Account (O/A) and Documents against Acceptance (D/A) export business.

Types of export factoring
According to whether we completely assume buyer's credit risk, there are basically two types of export factoring: non-recourse and recourse.

·Non-recourse factoring
At the instruction of the Import Factor, we will notify you of the credit line for individual buyer of your goods/services. If any of your assigned receivable which falls into the credit line is not collected on due date for the reason of buyer's financial inability, factors will assume your loss.
To meet your cash need, we will extend a loan which amounts to a certain percentage of the invoice value assigned to us.

·Recourse factoring
This refers to that we offer various kinds of factoring services, except buyer's credit risk protection. Commission for recourse factoring is much lower than that of non-recourse factoring.
Which type of export factoring suits you?
If any of the following applies to your open account exports, we recommend you with non-recourse factoring; otherwise recourse factoring might be alternative:
1. Buyer refuses to adopt L/C as a means of payment, thus considerable turnover of your export has to be settled on open account.
2. You are concerned about buyer’s credit status while exploring new markets.
3. You are in great need for advance while your collaterals are unacceptable to banks.
4. You need to cash your account receivables so as to substantially improve your financial position and manage the foreign exchange risk.

Operational Process

1. Please make it known to your trading partner during negotiation that your open account exports are to use factoring services, so that buyer's cooperation can be expected when his local factor contacts him.

2. Upon receipt of your factoring application, we will forward it to an import factor at the buyer's location, who will inform us a credit line for your buyer. And then a factoring agreement will be signed between you and us.

3. Please assign the immature export receivables to us after shipment.

4. To meet your cash need, we will extend a loan which amounts to a certain percentage of the invoice value assigned to us.

5. On due date, factors will collect the receivables assigned. Upon receipt of the payment, we will pay you the balance after repayment of our finance as well as service charges.

For more detailed information about export factoring, please inquire our offices at your location.