Export Factoring / Discounting facilities

Most invoice factoring and discounting companies now offer export factoring and discounting finance facilities.

The main differences associated with export factoring are:

  1. The fees tend to be slightly higher
  2. A minimum annual turnover of £100,000 is normally required but this can also include domestic sales
  3. Currency movements can affect profit margins and it is prudent to use currency hedging to minimize risk
  4. Credit insurance protection is often required to reduce the risk of bad debt
  5. When shipping goods it is necessary to calculate accurately the number of funding days required and agree them with the invoice factor or discounter. Typically invoices are funded for a maximum of between 60 to 90 days, however from the point of dispatch to arrival with your customer may take 90 days. The customer then pays 30 days from the date of arrival so actual funding required would be 120 days to avoid re coursed invoices impacting on your availability and cash flow.

If you are importing goods we can also introduce you to trade finance specialists that can provide trade finance facilities that will assist you with documentation (for example letters of credit and bills of exchange) in addition to finance for your imports.

Single debtor factoring, single invoice factoring & transactional finance

Businesses can sometimes require finance from a factoring company against a single customer (single debtor or prime debtor). This may be due to a prime debtor concentration of trade into a single customer, or seasonal trading peaks, or you may just want finance against one customer for a specific project without giving the factor your whole sales ledger.

We are able to introduce you to companies that can provide finance against single debtors (prime debtors) or even single invoices to improve your cash flow.

Trade Finance

We can help you raise finance in respect of goods that you are importing from suppliers abroad or, in respect of export sales, to customers that are based abroad (Export Finance). We can even help with cross-border transactions where the goods move from one foreign territory to another.

This type of facility enables you to pay your suppliers on time whilst receiving extended credit terms.

We have access to specialist trade financing companies that are experienced in all aspects of international trade such as letters of credit, bills of exchange and import documentation. We can introduce you to a trade finance provider that is suitable for your business. The cost of trade finance facilities depends very much upon your requirements and circumstances.

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You may also find our business finance glossary of terms useful.