What are the Benefits for Exporters & Importers 

Benefits for Exporters

International factoring has many advantages for exporters, by outsourcing his credit and payment collection activities. The commission paid to the factor is based on sales volume so there are no up-front fees like credit insurance or fixed operating costs when sales are slow. This makes international factoring more economical: it's a 'pay-as-you-go' scenario.  

 

The benefits of international factoring for exporters include:

  • Working Capital improvement.

  • Access financing at better conditions, benefitting of creditworthiness of the buyer.
  • Reducing time-consuming credit administration and costs.
  • Reducing risk while offering foreign customers competitive open account terms.
  • Expanding turnover by offering flexible payment terms.
  • Strengthening of revenues by improving DSO.
  • 100% credit protection against bad debts and customer insolvency.
  • Better borrowing potential and an opportunity to make use of supplier discounts.

Benefits for Importers

In today's fast-moving world of international trade, importers are much less enthusiastic about accepting the financial burden put on them, factoring allows Imports to negotiate a longer payment term.

 

The benefits of international factoring for importers include:

  • Improvement of working capital due to later settlement of payables (DPO extension).
  • Payment to local accounts, no additional bank charges.
  • The opportunity to buy goods using convenient open account terms.
  • Expanded purchase power without using existing credit lines.
  • Removing the need to open letters of credit, no administrative burden and costs, the ability to place orders swiftly.
  • Communication with a local bank/factoring company regarding disputes or delays of payments.

What are the Benefits for Export Factors & Import Factors ?

Benefits for Export Factor

  • Direct monitoring on the receivables portfolio by the Factor/Bank
  • Import Factor takes credit risk on the buyer
  • Import Factor performs collections / dunning procedure
  • Import Factor takes legal action on buyers if required
  • Export Factoring offer to seller without setting up operation in a large number of countries
  • Enhanced collateral control
  • Transactions exchanged electronically via edifactoring.com, reduction of manual activities.

Benefits for Import Factor

  • Enhanced payment experience with buyers from cross-border purchasing
  • Additional source of revenues from Import Factoring services (risk assumption + collection);
  • Reverse Marketing opportunities
  • Additional business volumes through Correspondent Factoring
  • Increase of buyer portfolio
  • Transactions exchanged electronically via edifactoring.com, reduction of manual activities.