Import and Export Factoring
First Capital offers international factoring to:
Suppliers seeking
to:
- Increase competitiveness by offering
open account credit terms
- Obtain 100% credit risk protection
of U.S. / foreign buyer receivables
- Outsource collection and cash
application services for open account sales
- Finance international accounts
receivable (A/R)
Importers seeking
to:
- Improve cash flow by obtaining
longer trade credit
- Avoid use of their bank credit
line / cash to issue letters of credit or up-front payment to
suppliers
Description
Agreement between First Capital and a foreign exporter
under which First Capital provides:
- Up to 100% guarantee of the importer’s credit risk (post-shipment
as well as new Pre-Delivery Guarantee – available up to
60 days prior to shipment for 50% of exporter’s sale price
to importer)
- Accounts receivable collection service
- Cash application services (no advances)
For foreign exporters (and their
lenders) seeking to protect against the insolvency/bankruptcy of
U.S. importers prior to the delivery of goods/services,
First Capital now offers its Pre-Delivery Guarantee.
In the event of the importer’s bankruptcy up to 60 days prior
to contractual delivery of goods/services, First Capital guarantees
50% of the exporter’s
sale price. This credit risk protection can be assigned by exporters
to their bank to support repayment of any production loans
Variations
of international factoring include, but are not limited to: Collection
only transactions (no credit risk guarantee), Non-Notification
business (importer is not notified that the invoice has been factored),
Back-to-Back (factoring the U.S. subsidiary/agent of a foreign
exporter with assignment of the collected accounts receivable to
the foreign
bank or exporter)
First Capital also offers export factoring as an
optional addition to traditional domestic factoring clients as
well as on a stand alone
basis
Structure / Process
- Under the export factoring agreement (with
a foreign financial institution or directly with First Capital),
the exporter submits
importer names and requests a maximum credit limit and payment
terms for approval
- Invoices are assigned by the exporter to the factor
- First Capital
receives the assignment either directly from the exporter or
by reassignment from the exporter’s factor
- First
Capital collects the accounts receivable at maturity and remits
cash to the export factor/exporter
- If the importer fails
to pay for reasons unrelated to product or performance dispute,
First Capital pays up to 100% at 90 days from due
date
This Program is designed for:
- Foreign exporters seeking to increase sales to U.S. importers
by using open account credit terms
- U.S. sales agents / subsidiaries of foreign exporters
- U.S. exporters seeking to use open account credit terms
as a sales tool
Pricing
Typically, a fee is charged as a percentage on the invoice
value plus prime-based interest for accounts receivable financing,
if applicable.
The fee and interest rate depend on the volume and size of invoices
and the credit quality of importers
Criteria
Minimum annual export factoring volume of $1 million
For
further information, please call 800-619-0804 or click Contact
Us. |
