Export Factoring

export-factoring-how-it-can-help-your-businessExport factoring is a very specific product. It is of course a type of export finance but it differs from export invoice discounting and offers certain benefits over and above the benefits of export invoice discounting. We would welcome the opportunity to discuss your options so please contact us on 0845 251 4040.

Export factoring is a product that can help UK based business expand sales into new markets. It can assist where businesses are already exporting or it can help a business break into new markets.

So how can export factoring help your business?

  • In the first instance it can release up to 85% of the gross invoice value of your invoices. This can smooth cash flow and allow you to make necessary payments to suppliers without having to wait for overseas customers to pay.
  • Importantly, export factoring can release cash against invoices sooner than what export invoice discounting can. This is because certain INCO terms allow for invoices to be funded once good title has passed. With invoice discounting the goods actually have to arrive at the customer and then an invoice will be raised and funded. As such export factoring does offer a funding advantage over export invoice discounting. It can also reduce reliance on expensive trade finance facilities.
  • With export factoring all customers will be on the same recourse period meaning that debts will typically be funded for 90 or 120 days from invoice date. Unfortunately in some instances this may not be long enough. In southern Europe payment terms can be 120 days meaning that invoices can be removed from your funding even before they fall due in some instances. Fortunately, with export invoice factoring the recourse period can be set by country or by customer. This means that export factoring can generate more cash for your business.
  • With export factoring facilities local bank accounts are used to receive payments. This means you benefit immediately from customer payments rather than waiting for them to negotiate their way through different countries banking systems. This not only improves your cash flow it also reduces your costs.
  • You can take advantage of confidential multi-lingual credit control. Debts are collected by people who speak the local language and they call as though they are calling from your company. Letters are also sent out in the debtors language on your headed paper. Where it is available local branches across the globe will assist in collecting your debts in locally.
  • Bad debt protection can be included to minimize the risk of bad debts and provide additional peace of mind.

If you have ever considered exporting then export factoring can help you do so with the minimum of risk. It really is a fantastic service that allows expansion into new markets with peace of mind. We would welcome the opportunity to speak to any business that already exports or is considering exporting. Please contact us on 0845 251 5050


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