-
01
Exporter receives purchase order
-
02
Exporter sends importer’s information for credit approval
-
03
Export factor checks the importer’s creditworthiness through FCI partner
-
04
Import factor evaluates the importer and sets a credit limit
-
05
Exporter makes shipment to importer
-
06
Export factor makes cash advance up to 80% of assigned invoices
-
07
Collections are carried out by the import factor
-
08
Import factor remits funds to Export factor
-
09
Export factor remits the 20% remaining Balance to exporter’s account less any charges

STEP 01
Exporter receives purchase order
The foreign buyer places an order with the Exporter under “open account” payment terms. The Exporter has signed an export factoring agreement with a Bank or a Factoring Company in his country and his Factoring Company is a member of FCI.

STEP 02
Exporter sends importer’s information for credit approval
The Exporter sends all information about the foreign buyer to his Factoring Company (exact name, address, identification number, maximum outstanding amount, payment terms).

STEP 03
Export factor checks the importer’s creditworthiness through FCI partner
The Export Factor has chosen an Import factor in the buyers’ country and has signed an Inter Factor Agreement, agreeing on mutual cooperation in the two-factor system, based on FCI’s General Rules of International Factoring and on the use of edifactoring, FCI’s messaging system. The Export Factor will send through edifactoring a credit approval request on the buyer to the Import factor

STEP 04
Import factor evaluates the importer and sets a credit limit
The Import Factor will analyse the creditworthiness of the buyer in his country, based on his internal credit information or by using the services of a local credit insurance company. The Import factor will send to the Export factor his decision to approve (or refuse) the requested credit limit approval.

STEP 05
Exporter makes shipment to importer
The Exporter will be advised by his Factoring Company about the Credit Approval on the buyer and will ship the goods. On the invoice the Exporter will advise the buyer that payment will have to be made on due date on the bank account of the Import factor.

STEP 06
Export factor makes cash advance up to 80% of assigned invoices
The Exporter receives pre-payment (generally up to 80%) of the invoice amount from his Factoring Company, based on the Factoring agreement signed with his Factoring Company.

STEP 07
Collections are carried out by the import factor
The Import Factor will send reminders to the buyer to receive payment on due date and will start collection procedures if no payment is received. The Import Factor being situated in the buyers’ country will do these collection efforts in the buyer’s language and according to commercial and legal practices from his country. If the approved buyer still hasn’t paid for reasons of insolvency on 90 days after the due date of the invoice, the Import Factor will pay the Export Factor and will continue legal collection activities with the buyer.

STEP 08
Import factor remits funds to Export factor
As soon as the buyer has paid the invoice, or in case of non-payment by the buyer at 90 days after due date for reasons of insolvency, the Import factor will make a SWIFT payment to the Export Factor for the invoice.

STEP 09
Export factor remits the 20% remaining Balance to exporter’s account less any charges
The Export Factor will clear the invoice in his books and will pay the remaining balance (20% if pre-payment was 80%) to his client, the Exporter.