Export factoring without recourse- most in demand Russian companies a type of international factoring operation in which the Export Factor fully assumes the risk of non-payment of an export delivery by a non-resident buyer. As a rule, this type of international factoring is implemented according to a two-factor model.

Algorithm for implementing export factoring without recourse, two-factor model:

At the same time, the Export factor through information system FCI or IFG sends a request to Import Factors in the state of the non-resident buyer in order to guarantee the return of proceeds and assess the solvency of the non-resident buyer.

2. After passing underwriting and receiving confirmation from the Import Factor, an export factoring agreement is concluded without recourse (General Agreement on general conditions factoring services for export supplies). The non-resident buyer is sent a notice of its conclusion and instructions for making payments.

3. The Exporter makes the delivery and, in accordance with the export factoring agreement, without recourse, transfers shipping documents to the Export Factor (usually the original invoice, the original or a copy of the bill of lading, a copy of the state customs declaration (CCD)) , the transfer of the monetary claim (the right to receive proceeds) to the export factor is completed.

4. The export factor, having verified the delivery, provides the exporter with financing in the amount of 70 to 100% of the invoice (delivery) amount. Financing is paid in Russian currency. The Export Factor's commission is paid by deducting a percentage of the financed amount, or on a separate invoice.

5. The exporter returns the financing to the Export Factor after receiving proceeds from the non-resident buyer. In case of delay in payment or refusal to pay for the delivery, the amount of proceeds is transferred to the exporter by the Import Factor.

Export factoring with recourse rights- the most popular type of export factoring in Russia, it is characterized by a low risk commission, since the range of services does not include protection against non-payment by a non-resident buyer. This type International factoring is used to increase the volume of export deliveries to reliable counterparties abroad, as well as to prevent cash gaps during long delays in payment. Export factoring with recourse is most often implemented using a one-factor model.

Algorithm for implementing export factoring with recourse rights, two-factor model:

1. To conclude an international factoring agreement, it is necessary to provide the Export Factor with information to analyze the financial, economic and production activities exporter (for a list of documents, see the “Factor Profile” section).

The exporter indicates the countries and companies with which foreign trade is carried out and provides copies of foreign trade contracts for supplies with deferred payment.

The period for reviewing documents and assessing risks (underwriting) can range from 7 to 30 days.

2. After passing underwriting, an export factoring agreement with the right of recourse is concluded (General Agreement on General Conditions for Factoring Services for Exports). The non-resident buyer is sent a notice of its conclusion and instructions for making payments. According to the payment instructions, the proceeds must be sent by the non-resident buyer to the exporter's factoring account at the Export Factor's bank.

3. The Exporter makes deliveries and, in accordance with the export factoring agreement with the right of recourse, transfers shipping documents to the Export Factor (as a rule, the original invoice (invoice), the original or a copy of the bill of lading, a copy of the state customs declaration (CCD)) , the transfer of the monetary claim (the right to receive proceeds for a specific supply) to the export factor is completed.

4. The export factor, having verified the delivery, provides the exporter with financing in the amount of 70 to 100% of the invoice (delivery) amount. Financing is paid in Russian currency. Payment of the factoring commission is carried out by deducting a percentage of the financing amount, or by deducting it after receipt of proceeds from a non-resident buyer.

5. In the event of no receipt of revenue from a non-resident buyer, the Export Factor updates the waiting period - the period during which a set of measures is taken to pay off the debt. If it is not possible to receive proceeds from a non-resident buyer, the Export Factor sends the exporter a notice of recourse and a demand for the return of previously paid financing for the unpaid delivery by the non-resident buyer.

Import factoring- the largest type of international factoring in Russia in terms of volume. Distinctive feature import factoring - the Russian importing company does not incur direct financial costs: with a two-factor model, commissions for service and financing are paid by the non-resident supplier. Import factoring according to the two-factor model does not imply the right of recourse.

The non-recourse import factoring algorithm according to the two-factor model is a “mirror image” of the non-recourse export factoring algorithm.

Russia also uses an import factoring scheme with recourse rights, in which the Russian Import Factor issues a guarantee to the non-resident supplier's bank, eliminating the risk of non-payment for the delivery.

Export from Russia is the lot of giants. Small and medium business rarely participates in foreign trade operations. The point here is not only high competition, but also the difficulty of entering export markets. International factoring will make this task much easier.

Foreign expansion requires large investments. It is necessary to find buyers, agree with them on the terms of delivery, resolve customs issues, and deal with the legislation of the importing country. While these long processes are being established, money will have to be invested in them. And the first payments for exported goods usually arrive with a significant delay.

Export factoring can eliminate most of these problems. Moreover, financing is only the simplest part of this service. Payment for export shipments is usually delayed for several months. This is due to both the deferred payment required by buyers and the complexity of cross-border financial transactions. When using export factoring, you will receive money immediately after shipment. The allocation of funds will be a factor.

The main advantage of factoring is that you find a partner who represents your interests abroad. This partner will be a factoring company that will check your potential buyers.

The circuit is a little complicated, but worth understanding.

Step one: you find a buyer abroad and make sure that he agrees to work with factoring. Let's assume that the "abroad" is Spain.

Step two: you choose a Russian factoring company, which becomes your export factor.

Step three: the export factor contacts its Spanish colleagues (factoring companies) to find out if they are ready to serve your buyer. If one of the companies agrees, it becomes an import factor.

Step four: import factor checks financial condition your Spanish partner and his solvency. Based on the results of the inspection, a financing limit is established - the maximum amount that the import factor is willing to pay instead of the buyer.

Step five: the Spanish import factor informs the Russian export factor about the established financing limit. You supply goods abroad within this maximum amount. When the delivery is documented, the export factor transfers the money to your account.

Step six: Having received the goods, the Spanish buyer has a grace period, after which he pays for the delivery to your account. If suddenly the buyer was unable to pay, the Spanish factor will pay instead, since he assumed the risks of non-payment.

Factoring is ideal for scaling your exports. Few people risk starting trade abroad in large quantities - there is always a risk that the goods will not sell. If there is demand for a product, factoring will help quickly increase export volumes. You won't have to be distracted working capital out of business to secure additional supplies.

For businesses that ship goods with deferred payment on a regular basis, this is a convenient solution. It allows you not to worry about non-payments from buyers and insures your risks.

Domestic companies often use another type of this service - direct export factoring. There is only one factor involved in it – Russian. He does not carry out any work with foreign buyers and does not take on the risks of their non-payment. He simply issues money to the exporter for the period of deferred payment. When the buyer transfers the payment, the exporter settles with the factor. And if non-payment does occur, the exporter will have to repay the debt himself.

Whatever type of export factoring you choose, it will become a convenient tool for financing your overseas supplies.

Export factoring is one of the types of international factoring, which represents various services, taking into account deferred payments for all. In this case, the people who enter into this agreement may be in completely different countries. Export factoring is carried out thanks to direct export or two-factor export models. If you choose the export type, factoring can work directly with importing buyers. Typically, this happens when the Importer has a close relationship with the exporter, or when, in a transaction with a reliable buyer of the supplier, they were able to show themselves correctly and are already confident in their work. Factoring will ask Factoring where the buyer is located. If we take into account export factoring, then in this case the relations between the two parties will be regulated according to the supply agreement and the interfactor agreement. There is also export factoring and import factoring.

Positive aspects of export factoring

First of all, you expand your sales opportunities, taking into account the use of competitive conditions and also taking into account payment terms. You can also significantly increase the working capital of the export itself, because financing according to factoring does not require collateral and can grow due to increased sales. Also, thanks to export factoring, you receive unlimited and perpetual financing, in general, regular services. The company also protects you from the risks of non-payment. Export factoring also speeds up and simplifies the procedure for receiving and processing payments, and helps manage factoring and accounts receivable. In this article we have not covered much positive aspects such factoring, but they are one of the important positive aspects of this export factoring. If we remember and talk about bank loans or loans from companies, we can draw a big conclusion. Let's just remember about applying for a loan from a bank. To apply for and receive a loan for any amount of money, you must first leave something as collateral.

Usually real estate, cars or other important and expensive valuables were left as collateral. At the same time, if you did not manage to repay the loan on time or did not repay it at all, then the bank has every right to take away your apartment in the form of compensation. If we remember applying for and receiving loans from companies and banking institutions, then when receiving money they were also required to leave something as collateral. But the plus was that if you left something as collateral, for example a car, then you were obliged to give the company spare keys to it and you could use it completely. It was only forbidden to sell it, give it as a gift, or bequeath it to anyone until you fully repay the loan. Loans, of course, were a little better than bank loans, but factoring does not require anything as collateral. In general, you can take money without having to give anything as collateral. This offer is even more profitable than loans or credits from banks.
Factoring Life is the first and only factoring establishment in Russian Federation, which specializes in factoring for small and medium-sized businesses. Also, this company with great confidence takes an honorable first place in terms of the number of clients among all similar companies throughout the Russian Federation. There is also VTB factoring.

In order to conclude a factoring agreement, you first need to write an application. Such a statement can be written to a factoring company, bank or company. You need to come to this company and turn to its employees for help. They will tell you about this factoring service, all the advantages and disadvantages of such an offer. They will be happy to answer all your questions and help you avoid deception and fraud. Once you are sure that such a service will be beneficial for you, you can write an application. In the application you will have to indicate all the necessary data for this service, you must also indicate the purpose and amount you need. After this, you leave an application with the company that deals with factoring, and it reviews it within one or two days. After that you will be given an answer - it will be positive or negative. If the company approves your request, then they should call you and make an appointment with you in order to sign a factoring agreement. You need to bring the necessary documents to this meeting.

List necessary documents It can also be different for different services, so it would be better if you call and check this with the employees of this factoring company. At the meeting, you present these documents, read the terms of the agreement and sign it. Be careful when signing the contract, do not rush to sign it. Read the terms and conditions of the agreement carefully and more than once. Know that if the agreement has already been signed, then it will be impossible or very difficult to change anything that does not suit you. Many people have encountered such problems when they did not read the terms of the contract or were not careful when signing. Then, when financial problems or bad situations began, but when clients already contacted the company to change the terms of the contract or refuse it altogether, the company replied that nothing could be changed, because the contract contains your personal signature. Therefore, when concluding any agreements, be it a bank, a company or a banking organization, be careful and do not rush to sign important documents until you are sure of their correctness.

There is an official website of this company on the Internet, where you can independently get acquainted with factoring, types of factoring, its conditions and services. Also on the official website there are numbers by which you can contact this company. You can resolve all issues that bother you or that you do not understand over the phone. Our employees provide the best customer service and try to make companies much better not only in the service sector, but also in the field of profitable services and suggestions. We will be happy to help you!

In conditions when the economy in the country is not sufficiently stable, any company strives to use tools that help accelerate the turnover of financial assets and minimize the risks that often arise when delivering goods with deferred payment.

In this article we will talk about factoring - perhaps the only financial instrument that allows you to work with partners on international transactions with deferred payment.

The concept of factoring and its application in international trade

Factoring is not just a form of financing supplies, but the whole complex services. This distinguishes its essence from the more familiar instruments of international trade (guarantees, etc.).

The parties to the transaction are:

• Provider– a seller of goods (works, services) interested in receiving payment for them as quickly as possible.
• Buyer, purchasing goods (works, services), for whom it is profitable to pay for the delivery with as much delay as possible.
• Factor– Bank or factoring company. Pays the Supplier part of the Buyer's receivables.

In international factoring, the Supplier and the Buyer are residents of different countries.

There are objective reasons for the global popularity of factoring services:

1. Difference of interests of the Supplier and the Buyer in the settlement procedure. The first is interested in receiving advance payment, and as early as possible; the second is to pay for the goods with a maximum delay.
   Therefore, they involve a neutral party - the Factor. He fills the “gap” in the trading operation without damage to its participants (buys out accounts receivable, replacing part of the trade credit with “real” money).
2. In a difficult economic situation, factoring is in demand due to the absence of property collateral and lower risk due to short-termism.
3. An issue of trust between the Supplier and the Buyer, especially if there is no positive history of business relations.
4. Differences in the legislation of the states whose residents enter into the Contract give rise to the risk of mutual failure to fulfill obligations.
5. Transferring the labor-intensive receivables management function to a third party.

Factoring is especially in demand in difficult economic situations.

Russia’s place in the world economy determines the significance of its role in international trade both as a Supplier and a Buyer. In the Russian Federation:

1. Export operations predominantly associated with raw materials (energy, metal, timber) and industrial goods.
2. Imported mainly consumer goods (furniture, construction and finishing materials, computer and Appliances, some medications).

For business

Export factoring

Which type of export factoring is right for you?

International export factoring services are provided according to two schemes.

• Export factoring with recourse. This is the most popular format of mutual settlements. The presence of recourse gives financial company in case of non-payment Money the debtor and refusal to deliver the right to claim them from the supplier after a certain time. The factor assumes liquidity risk. The credit remains with the supplier.
• Export factoring without recourse. In this case financial institution takes full responsibility. This determines the fact that non-recourse factoring services require a thorough check of debtors for solvency. If the client fails to pay the funds in full, the factor will suffer losses.

More about export factoring

Export factoring is a set of services for regulating mutual settlements between suppliers and buyers from different countries. Factors provide clients with the following services:

• Financing without delays;
• Providing long-term deferments at favorable interest rates;
• Consultations and information support;
• Preparation of reconciliation reports;
• Debt control, etc.

The benefits are obvious. International export factoring services significantly speed up and simplify the organization of supplies abroad.

Benefits of export factoring

Export factoring gives counterparties a large number of benefits.

Buyers.

• Importers receive deferments to pay for supplies.
• Working capital is replenished without pledging property.
• The range is expanding.
• There is an opportunity to enter new markets.
• Interest rates on factoring loans are lower than the rates offered by banks.

Suppliers.

• Exporters receive most of the funds immediately.
• Sales are increasing.
• There are no significant cash gaps.
• The risk of buyers not paying for orders is significantly reduced.
• Do you want to order export factoring services? Contact us. We will assess the company's solvency and offer a suitable option for mutually beneficial cooperation.

home » Earn money online » Export factoring is a solution for small and medium-sized businesses. Export factoring International factoring comparison with export finance pdf