Factoring “finance without recourse”

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 which transfers all the Account Receivables to a Factor based on the current or future contract signed by the importer and exporter. The Factor offers trade finance, sales ledge management, pursuing account receivables, credit risk control, and delinquent payment guarantee.

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Factoring Benefits

  • Offer Open Account payment options to current and new importers in order to expand market, increase revenue and profit.
  • 80%-95% account receivable guaranteed discounting without recourse, transfers importers’ risk to factor.
  • Saved management costs for credit investigation/assessment, ledger management and pursuing delinquent payments. Eliminated lengthy process under documentary transactions.
  • Lower the debt/asset ratio by selling account receivables to the factor and improve balance sheet.
  • Evaded FX risk, turn the FX forwarding transaction to current to fixed the cost and convert FX into local currency.
  • Improve 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 costs) after presentation of stipulated documents and no more worries to the importers’ delinquent payments/non-payments since the factoring is non-recourse.

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