Factoring refers to the contractual relationship between the seller, supplier or exporter and the factor. According to the contract, the seller, supplier or exporter will base their present or future on the buyer (debtor).

Accounts receivable arising from sales contracts of goods or services have been transferred to the factor, who provides at least two services, such as trade financing, sales ledger management, accounts receivable collection, credit risk control and bad debt guarantee.

Second, the business is different:

Factoring business is equivalent to secondary factoring business, that is, the seller transfers the accounts receivable to the factor or bank, and the factor or bank transfers the accounts receivable to other factors or banks. For example, the international double factoring business is a kind of re-factoring.

In practice, there are many different ways to operate factoring business. Generally can be divided into: recourse factoring and non-recourse factoring; Explicit factoring and implicit factoring; Discount factoring and maturity factoring.

Third, the process is different.

International factoring business process:

Case: The business process of international factoring itself is not complicated. Taking the most commonly used double factoring as an example, this paper introduces the business process of international factoring.

The exporter is China pressure cooker manufacturer Company A, and the importer is French supermarket Company B..

After consulting with Company B, Company A wants to sell on credit (OA, 90 days).

Company A contacted a domestic bank (FCI member) to apply for international factoring business, and provided the bank with the background information (trade contract) related to the credit transaction.

Extended data:

Service type

Generally speaking, domestic factoring business is also called accounts receivable financing, which means that the company transfers your accounts receivable to the bank after passing the bank's audit and obtains funds in advance. According to different types, it can be divided into buyout factoring and repurchase factoring.

The audit point of factoring bank is mainly to audit the repayment ability of the debtor (that is, the company that owes money to the company).

Foreign factoring business is mainly a financial product designed according to the import and export business of import and export enterprises, and its main function is to let import and export enterprises obtain funds in advance. Specific products include packaged loans, invoice discounts and so on.

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