What is Export Factoring?

QNB Finansbank

What is Export Factoring?

How about a solution partner that will make it easier for you to trade in a foreign country? Would you like to have a guarantee of your receivables? Export factoring is the financing service offered in line with the needs of the exporter company, guaranteeing the receivables arising from the sales made abroad, tracking the collections. In simpler terms, export factoring is the process of providing guarantee, collection and, if requested, financing services separately or as a whole for open account forward exports.

What Are The Services Provided Under Export Factoring?

Warranty Service:

Before evaluating the buyer's demand abroad, you will be able to enter this market without risk by accessing financial data about that company and obtaining information about its position and reputation in the market.

With Receivable Management and Collection Service:

By managing your receivables and collections, you save time and expenses, and you are protected against large buyers in international sales.

Financing Opportunity:

With financing support, you can gain competitive advantages in existing and new markets.

What are the Advantages of Export Factoring for Exporter?

Has up-to-date information about the buyer's financial strength and credibility in the market thanks to its reliable intelligence information.

It gains the opportunity to enter new markets without risk.

Competitive power increases in existing markets.

While organizing the cash flow efficiently, it provides the opportunity to make more sales.

The financing used within the framework of irrevocable (irreversible) transactions is not reflected in the company's balance sheet as credits, a liquid balance sheet structure is formed.

Workload and cost arising from receivables and collection management are reduced.

It has initiative and strength in its sales to big and powerful buyers.

What is the Role of Factoring in Exports?

There are four parties in export factoring transactions: seller, buyer, export factoring company and import factoring company (correspondent factor). The seller shares information about the buyers with whom he wants to sell goods abroad with the export factoring company and requests intelligence for the buyer. The export factoring company transmits the information to foreign correspondent factors, and requests limits for buyer companies. When the buyer limit is approved, the export factoring company notifies the seller firm about this and undertakes the risk of non-payment of the buyer companies in line with the guarantee received from the correspondent. Following the signing of a factoring agreement between the seller firm and the export factoring company and receiving the confirmation of the buyer that he / she accepts the export factoring transactions, the assignment process can begin. The seller company transfers the invoices issued for the goods to be sent to the buyer companies and the documents showing that the export has been carried out to the export factoring company together with the assignment notification form. After the controls made following the assignment process, the export factoring company can make a certain part of the invoice amount used as a prepayment in the foreign currency of the receivable in line with the seller's request. When the invoice is due, the buyer pays the invoice amount to the reporter to the factor accounts, and the correspondent factor transmits the amount paid to the export factoring company. Following the realization of the collection, the export factoring company pays the remaining balance to the seller after deducting the commission and expense amounts based on the agreement made with the seller.

In irrevocable transactions; If the buyer fails to pay the invoice amount due to bankruptcy, insolvency, etc. and there is no dispute notified by the buyer for the invoice in question, the export factoring company collects the invoice amount from the correspondent factor and pays it to the seller within the scope of international factoring rules on the 90th day after the invoice date.