Export factoring

Export factoring is a financial technique where a factor (factoring company) takes over the company's export receivables by purchasing its international invoices.

The factor provides three complementary functions:

Financing: advance of 80 % to 95 % of invoice value within 24 to 48 hours
Receivables management: payment monitoring, reminders, collection
Credit insurance: coverage against buyer insolvency (non-recourse factoring)

International factoring often relies on the two-factor system coordinated by FCI (Factors Chain International): one factor in the exporter's country and a correspondent factor in the importer's country.

Costs include a factoring commission (0.5 % to 2.5 % of assigned turnover) and a financing commission (reference rate + margin). It is particularly suited to exporting SMEs with many customers and moderate individual invoice amounts.

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