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Factoring Services
Factoring is the purchase of short-term receivables and represents a form of post-sale finance for Sellers/Exporters selling on Open Account terms.
Services
Factoring services offer Finance, Credit Management and Credit Protection.
Finance Service: can make funds available to the seller up to 80% of the value of his eligible invoices. The Factor will follow up with the buyers for payment and collect them on the due date.
Credit Management Service: can help the seller to collect invoices by providing a professional sales ledger management and collections control function, saving the seller's time spent on such activities.
Credit Protection Service: provides protection for the business from the effects of a bad debt, leaving the seller to focus on running the business and meeting the demands of the customers.
Types of Factoring
There are two types of Factoring- Domestic and International:
Domestic Factoring is also known as Accounts Receivable Financing or Invoice Discounting and, as the name implies, relates to commercial transactions between two parties located in the same country.
International Factoring allows an exporter to offer Open Account terms and at the same time minimize the commercial risk of non-payment. Facilities offered to the Exporter are finance of short-term trade receivables and conversion of a receivable into immediate cash.
