defined
If there is no recourse Factoring advances to the above, but also guarantees payment of the balance, that is called non-recourse factoring, otherwise it is there recourse. There is a common financing factoring and factoring maturity (maturity factoring the exporter to sell its receivables to the factoring business, the factoring business in the invoice due date from the hands of the debtor to recover the debt, net of fees after that the money paid to exporters). Range of international factoring services are: financial services, credit insurance services, management services, credit investigation services.
species
concept
Due to the different business transaction practices in various countries and regions, and laws and regulations, countries go through the contents of the international factoring business and the practices are also different . According to differences in terms of the nature of factoring business, services, payment terms, such as financing conditions, we can make the following classification factoring business.
prepaid financing
According Factoring financing for exporters paid or not, is divided into factoring financing (financial factoring) and maturity factoring (matudty factoring). Also known as factoring financing advance factoring, accounts receivable is an advance business. When exporters will represent the notes to the accounts receivable factoring business, factoring business immediately provide no more than 80% of accounts receivable financing to exporters with a prepayment, the remaining 20% of the accounts receivable to be after factoring providers charge the full payment to the debtor (importer), re-settlement. This is a typical way of factoring. Maturity factoring refers does not provide financing to exporters when factoring providers in receipt of exporters submitted on behalf of accounts receivable sales invoices and other documents, but the documents after the expiration of payment to the exporter.
FCI disclosed
The Factor disclosed or not, i.e., whether the sale of money paid directly Factoring, factoring into Publication (disclosed factoring) and covert factoring (undisclosed factoring), open factoring is the exporter must be in writing and will be involved in factoring providers inform the importer, and instruct them to money paid directly to the factoring business. International factoring business are mostly publicly type. Hidden factoring refers to the factoring business participation is confidential, importers do not know, the money still be paid directly to importers exporters. Factoring this way tend to be exporters to avoid letting others know their own due to lack of liquidity and the transfer of receivables, will not participate in the factoring business of the notice to the buyer, the purchase price still due when the exporter came forward collection, again Factor repayment of advance payments. As for the costs of financing and liquidation, proceed directly between factoring and exporter.
FCI claim over
The Factor whether to retain recourse, without recourse into (non-recourse factoring) and have recourse (recourse factoring). In non-recourse factoring, the factoring business according to the list of exporters to provide credit information, and check the corresponding credit limit for each customer, bad debt guarantees provided to exporters within the approved credit limit. Export sales in the relevant credit limit, has been approved as factoring business, so factoring business to this part of the acquisition of accounts receivable no recourse. Due to bad debt problems caused by the debtor's credit, bad debt losses borne by the factoring business. Most of this type of international factoring business is non-recourse factoring. Factoring with recourse, the factoring business is not responsible for auditing the buyer credit, uncertain credit, does not provide bad debt secured only provide other services, including trade finance. If the debtor due to lack of liquidity and the formation of bad debts, bad debts, factoring providers have the right of recourse to the exporter.
single double factoring Factoring
in accordance with its operating mechanism, is involved in export Factor two places, divided into single and double factoring factoring. Refers to single factoring involves only one Factoring factoring manner. As in the direct import factoring, the exporter and the import factor to do business; and in the direct export factoring, the exporters and the export factor to do business. Factoring involves buyers and sellers of factoring Factoring way is called a double. International Factoring generally use double factoring manner that exporters entrust their export factoring business, their export factoring business and then select the Import Factor Factor from importing States. Signed agency agreements between the two countries import and export factoring business, throughout the course of business, the two sides only need to import and export contacts with the respective factoring business.
Business varieties
1. Export Factoring
provide trade financing to exporters export credit, sales ledger management, debt collection and bad debt guarantees and other services.
2. Import Factor
importers use the imported goods on credit to provide credit risk control and bad debt guarantees to exporters.
3. Domestic factoring
(1) accounts receivable buy
to buy based on customer accounts receivable, to provide including trade financing, sales ledger management, accounts receivable collection and credit risk control and bad debt guarantees and other services.
(2) the acquisition and collection of accounts receivable
to preserve the right of recourse of the acquisition of the customer accounts receivable based, to provide trade financing, sales ledger management, accounts receivable collection and other three services.
factoring process
International factoring operation in two ways, i.e., single and double factoring factoring. The former involves only one of the factoring business, which involves both the import and export factoring business. International factoring business factoring generally use the dual mode. Factoring involves two-way four main parties, namely exporters, importers, the export factor and import factor. Below sum of export factoring for example, describes its business processes.
Export to a domestic textile companies want to export a silk garment importers Britain, and wants the use of credit (O / A) of payment.
◎ import and export trading parties in the course of consultations, the first textile company to find a domestic factoring business (as an export factor), to submit to apply for an export factoring business, fill out the "Export Factoring business application "(may be called" credit application ") for importers to apply for the credit line. Application generally include the following: Exporters business conditions; trading background information; quota case of application, including the currency, amount and type.
◎ domestic factoring business to choose the date of a British import factor, adopted by the International Federation of Li Bao (referred to as FCI) developed by factoring electronic data interchange system EDIFACTORING will notify the relevant import factor Manufacturers, importers please its credit assessment. Usually export factor has been selected with the signing of the "agency factoring agreement", to participate in the FCI organization and importers location Factoring as import factor.
◎ import factor based on the information provided, using various sources of information on credit and importers of such silk clothing market investigation. If the importer of imported goods have good credit and a good market, the import factor for importers preliminary approval of certain credit limit, and in the first five working days to notify the relevant conditions and offer our factoring business. According to international practice FCI regulations, import factor should reply to the latest export factoring business within 14 working days. Domestic factoring business line of credit will be approved importers and notify their offer textile companies.
◎ textile companies to accept the offer of the domestic factoring business, with the signing of "export factoring agreement", the official importer and deal with the contract, the contract amount of $ 500,000, payment for the O / A, for a period of 60 days after the invoice. After signing the "export factoring agreement" with the textile company, the export factor formal application for a credit line to import factor. Import Factor reply to the first three days the export factor, notified credit approvals, valid and so on.
◎ textile company according to the contract delivery, the original invoice, bill of lading, certificate of origin, quality inspection certificates and other documents sent importer, a copy of the invoice and a copy of the relevant documents (according to import factor requirements ) cross-country export factoring business. Meanwhile, the textile company also submitted "debt transfer notice" and "export factoring financing application" to the domestic factoring business, the former accounts receivable shipment of goods for sale to the domestic factoring business, which is used to protect domestic Li apply for financing. Domestic factoring business in accordance with the "export factoring agreement" is equivalent to 80% of the invoice amount to provide it (or $ 400,000) in financing.
◎ export factoring providers in receipt of a copy of the invoice and documents (if any) the day of the invoice and documents (if any) of the details of the notification import factor, Import Factor by EDIFACTORING system to invoice several days before the due date to begin collection importer.
◎ after the invoice due, importers pay the import factor, import factor will pay the money and our factoring business, our factoring business net of principal and interest and financing costs related to factoring, then the balance paid to textile companies.
Factoring Behavior
1, approval (Approval);
2, transferring (Assignment)
3, Finance (Finance )
4, then transferring (Subsequent Assignment)
5, issue a credit notification (Issuing Credit Note)
legal relationship
different international factoring their participation in the party is different. In the case of international dual factoring, will form a four-layer relationship between the exporter and the importer, exporter and the export factor, the export factor and import factor, importers and import factor.
1. Between the exporter and the importer is a sale contract goods.
2. A contractual relationship between the exporter and the export factor is established under export factoring agreement. Export factoring agreement is the main contract of international factoring transactions. According to the agreement, all qualified receivables within the exporter shall export factoring business scope of the agreement to transfer to the export factor, the export factor to obtain the true and complete accounts receivable for these rights effective, in order from accounts receivable are essentially to ensure efficient and have the appropriate value and there will not be any obstacles.
3. Between Export Factor and Import Factor is the factoring contract mutual relations. Between import and export factoring business factoring should be signed mutual agreement, the relationship has a legal relationship between the assignor and the assignee creditor, namely the export factor will retransfer the hands of suppliers to import purchased receivables factoring that is formed and then factoring legal relationship.
4. Between the importer and the import factor is a de facto debt payment. From the legal sense, there is no legal relationship on the contract between the importer and the import factor, but due to the import factor eventually acquired receivables of exporters importers, as long as between the exporter and the importer the contract for the sale or other similar contractual receivables are not clearly defined under the terms of the contract or contracts arising from a ban on transfers, FCI can legally effective access to accounts receivable, without the prior consent of the importer, and In fact the formation of debtor-creditor relationship between the importer.
Legal Issues
International factoring is a set of trade finance one for the exporters provided by the factoring business, accounts receivable management and debt collection and credit risk guarantees to the buyer comprehensive international settlement and financing one. Currently, the gradual formation of a buyer's market in international trade in an increasingly competitive international trade settlement form showing a trend of diversification, international factoring business because of its unique advantages to meet the current development of international trade, and thus in the world It has been widely recognized and applied. Brought international factoring business is related to the legal issues associated with it. International factoring business complex contains rights and obligations between the parties, and transfer of accounts receivable core of this international factoring and other services, resulting in a number of specific legal issues surrounding. In this paper, the traditional civil law theory, combined with the norms of international law, the purpose of the legal basis of international factoring and related legal issues surrounding this core. Meanwhile, in the actual paper on the basis of theory, analysis of the exporters and factoring business may face legal risks in carrying out this business, and the method of how to prevent these risks. Finally, how to accelerate the development of international factoring business in my country, the paper puts forward some suggestions. Around the above, the paper is divided into four chapters: The first chapter is the general legal issues of international factoring, it focuses on the historical development of the concept, types and specific mechanism of international factoring. International Factoring born out of the sales agent system and with the development of trade and gradually evolved into a more feature-complete, a new type of business profits gradually increased transactions, international factoring connotation gradually enriched. However, the concept of international factoring has not yet formed a unified understanding, this article from the point of view of economics and law of international factoring are defined: refers to the presence of international factoring in international trade between the exporter and supplier of a factoring kind of contractual relationship, according to the contract, the exporter will transfer its accounts receivable credit sales of goods or services based on a contract it entered into with the buyer arising from a factoring business, and by the FCI to provide comprehensive financial services. The different standards have different international factoring classification, and if recourse without recourse; maturity of financing and factoring factoring; single and double factoring factoring. Factoring these different forms corresponding to different operating mechanism. The second chapter is the legal basis and the nature of international factoring. International factoring complexity it is necessary to determine the appropriate legal regulation, to better clarify the rights and obligations between the parties of international factoring, on this issue, you must first seek an international factoring stable legal basis and theoretical support. About the legal basis of international factoring there are different views, such as the agency said, and debt repayment subrogation say the pledge say so on.
significance
international factoring business in our country is a relatively new settlement financing business. With my country's accession to WTO, banking competition will become more intense. State-owned commercial banks in this business, on the one hand is conducive to self-improvement, business variety, and expand service targets, increase profitability, improve competitiveness; on the other hand can also strengthen business ties with the world's major banks to improve on their own in the international the status and role.
Under the premise of the banking sector step up publicity efforts, my country's foreign trade enterprises to cope with this new settlement to be fully aware of, and actively promote the adoption of the role of factoring business into full play, to further promote my country's foreign trade development of.