International factoring is a relatively popular comprehensive financial business and is developing rapidly in China. The reason why international factoring business is favored by my country's small and medium-sized foreign trade enterprises is especially its own application advantages. However, because it is an emerging payment method, although it is used by a large number of small and medium-sized foreign trade companies, it also has certain problems.
International Factoring (International Factoring) refers to the use of settlement methods such as Documents against Acceptance (D/A) and Sales on Credit (O/A) in international trade. Factoring The merchant accepts the entrustment of the exporter and provides the exporter with a comprehensive financial service of the importer's credit line investigation, credit risk guarantee, accounts receivable management and trade financing. It is a comprehensive financial service that integrates financing, settlement, financial management and credit guarantee. The integrated financing settlement method is currently one of the more popular international settlement methods after remittance, collection, and letter of credit. ?
1. Application advantages of international factoring in small and medium-sized enterprises in my country
Compared with large enterprises, international factoring business is more suitable for small and medium-sized enterprises. The characteristic function of international factoring is the acquisition and management of corporate accounts receivable. It can not only meet the urgent need for financing of small and medium-sized enterprises with limited capital and urgent need for funds, but also help small and medium-sized enterprises with immature financial management systems to reduce the cost of financing. Financially manage costs and increase profits. Therefore, international factoring business is very suitable for those small and medium-sized enterprises whose products are truly marketable but cannot solve their liquidity shortage through bank loans due to small asset size and lack of qualified collateral or guarantees. my country's small and medium-sized enterprises exactly have problems in financing difficulties and insufficient customer information management. Therefore, the application of international factoring in my country's small and medium-sized enterprises has strong advantages. International factoring business not only enriches corporate financing methods and reduces the management costs of accounts receivable for small and medium-sized enterprises, but also helps small and medium-sized enterprises reduce risks and open up new markets.
2. The current situation and existing problems in the application of international factoring business by small and medium-sized foreign trade enterprises
Small and medium-sized enterprises do not have enough awareness of factoring business. Since the international factoring business has not yet become popular, many operators and employees of small and medium-sized foreign trade companies do not understand this business. At present, the exports of my country's small and medium-sized enterprises are still mainly labor-intensive products such as clothing and handicrafts. These products are highly subjective and can easily cause contract disputes. In factoring business, when the buyer and seller have disputes about the product or the buyer is picky about the quality of the product, the factor will not bear the payment responsibility. Therefore, exporters prefer traditional trade settlement methods.
There is a scarcity of professional talents related to international factoring business. International factoring business involves many professional fields such as international trade, banking, and law. It not only requires those engaged in international factoring business to have proficient English communication skills, rich knowledge of international trade, finance, and law, but also to be familiar with relevant international Factoring Practice Rules. At present, because international factoring business accounts for a relatively small share of my country's international settlements, my country still lacks a corresponding training mechanism for international factoring business talents. At the same time, there are few talents who are proficient in international factoring business among small and medium-sized enterprises. Therefore, this business has not gained enough room for development.
There is a lack of credit system for international factoring to survive and develop. At present, our country's corporate credit system is not complete. Domestic banks often consider risk factors more when handling factoring business and are limited to companies whose exporters and importers are both customers of the bank. For small and medium-sized enterprises with strong demand for factoring business, they are often excluded from bank factoring business because they do not have the credit standards required for factoring business.
The construction of laws and regulations related to international factoring lags behind. In 1992, my country promoted the international factoring business for the first time and joined the International Factoring Federation that year, accepting the "two rules and one agreement" recognized by the international factoring community, namely the "International Factoring Customary Rules" and the "International Factoring Arbitration". Rules" and the International Convention on Factoring Services. However, these rules cannot directly guide and supervise the specific implementation of factoring business in my country. In addition, my country's "Contract Law", "Company Law", etc. do not clearly stipulate many issues related to legal protection and dispute resolution of international factoring business.
3. Countermeasures and suggestions for promoting international factoring in small and medium-sized enterprises
1. Increase publicity and expand business influence.
Major commercial banks should make full use of their extensive branch network and vigorously promote international factoring business through newspapers, radio, television and other media. At the same time, we should deeply understand the real situation of enterprises, widely publicize and promote international factoring business, and provide the most humane and personalized solutions to small and medium-sized enterprises, so that more small and medium-sized enterprises can understand and adopt international factoring business, thereby guiding, cultivating and Stimulate the demand of foreign trade enterprises for international factoring business. At the same time, small and medium-sized enterprises should also actively understand this business and choose the most suitable factoring solution based on their own trade characteristics.
2. Accelerate the training of international factoring business talents. Financial institutions and small and medium-sized enterprises should pay attention to and strengthen business training for employees, and use mature foreign management models and rich transaction experience to cultivate employees' professional skills. Improve the theoretical and practical level of international factoring business personnel by learning advanced international experience or conducting exchanges and discussions among practitioners.
3. Gradually establish our country’s credit management system. First of all, the basic law and corresponding administrative regulations directly related to the credit industry should be promulgated as soon as possible to promote the standardized and healthy development of the credit industry. Secondly, relevant government departments should provide some content in the self-built database to or share with credit intermediaries on the basis of establishing industry or departmental databases in advance to provide support for the development of my country's credit industry. Third, establish a sound credit system, strengthen the risk prevention capabilities of my country's commercial banks, develop my country's international factoring business, and promote the development of my country's foreign trade.
4. Establish a legal system and legal environment for the normal operation of the international factoring industry. On the basis of introducing existing international conventions and international practices, combined with my country's current reality, management regulations and specific operating methods for international factoring business will be promulgated as soon as possible, and relevant laws and regulations will be revised and improved in a timely manner to facilitate the smooth development of international factoring. Factoring creates a good external environment. Financial institutions should formulate and improve relevant rules, regulations and business operating procedures to improve the operating efficiency and international competitiveness of factoring institutions, ensure the healthy, sustained and rapid development of factoring business, and effectively promote the development of foreign trade.
About the author:
Yu Xiaohua (1977.10- ), female, from Tonghua, Jilin, lecturer at the School of Foreign Languages, Changchun Institute of Technology, Master, research direction: Economic and Trade English.