We Help Our Clients Maximize Their Success in International Transactions

Factoring “Non-Recourse Finance”

Do you have below concerns when you us Open Accounts (OA) to settle export business with foreign importers?

  • Working capital pressure
  • Unknown/Uncertainty to the importers’ risk
  • Account Receivable Management
  • Pursuing delayed payments

Factoring, a trade finance product by which Account Receivables generated from current or future sales contracts are sold to a Factor, who offers service in trade finance, sales ledger account management, account receivables collection, credit risk control, and bad debt management.

Factoring Benefits

Benefits to exporters

  • Offer an Open Account payment option to existing and newly acquired importers in order to expand market share, increasing revenue and profit.
  • Upto 80%-95% of the account receivables are guaranteed by discounting without recourse, transferring importers’ default risk to factor.
  • Save management costs in credit investigation/assessment, ledger management and bad debt management, eliminate steps in lengthy process under documentary transactions.
  • Lower debt/asset ratio by selling account receivables to a factor, improving balance sheet.
  • Protect against FX risk, turning deferred FX earnings to sight ones, allowing early settlement.
  • Advance export tax refund and save financial cost.

Factoring Arrangement

In order to improve efficiency, we suggest exporters to provide below basic information during the negotiation of sales contract. OTFC may quote our price and arrange potential factor

  • Importers Country
  • Importers Name
  • Commodity
  • Value
  • Shipment Date
  • Tenor

The exporter may receive discounted proceeds in advance (after deducting commission and other relevant charges) after presentation of stipulated documents, having no liability regarding the importers’ possible default on payment.

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