International Factoring

Factoring is an ideal solution for companies in need of a trouble-free procedure for financing export sales and collecting payments from buyers. Through factoring, exporters can maximize their cash flow, minimize their risks, and still provide flexible payment terms for their buyers.

How does international factoring work?

International factoring is more complex than domestic factoring because international transactions involve two factors. A domestic factor represents the U.S. company exporting its goods. A foreign factor represents the overseas company importing the U.S. products.

The two factors interact to define the terms of the agreement. The foreign factor often will know more than the domestic factor about such issues as exchange rates, import and/or export tariffs, and trade restrictions and regulations. Also, the foreign factor will be responsible for setting up letters of credit and making other arrangements with the foreign company’s banks.

Why use international factoring?

International factoring gives companies of all sizes and experience flexibility for exporting and importing. It is also less risky than open account and credit insurance.

From the importer/buyer’s position, factoring is comparable to open accounting and, unlike letters-of-credit transactions, does not impact bank lines of credit. From the exporter’s position, credit insurance involves claim recovery delays, and the U.S. seller must prove reasonable efforts to collect. Factoring has neither of those issues.

International factoring provides a tremendous service to United States companies wishing to export goods and services overseas. Factoring allows companies to be more competitive and to qualify for open terms. ProActive Capital Funding can help you find the best factoring opportunity for your needs and guide you through the factoring process.

For additional information, contact:

Ray King <> The ProCoach
Phone: 832-615-9124 * Fax: 832-615-9570