Factoring is a financial transaction and a type of debtor finance in which a business sells its accounts receivable (i.e., invoices) to a third party (called a factor) at a discount. A business will sometimes factor its receivable assets to meet its present and immediate cash needs. Forfai...
Content: Beneficiaries, Details: Exporters : companies with at least 1 year of experience producing or exporting the product or other similar product, or those that have regular transactions with their foreign buyers Importers : foreign governments, foreign companies, overseas subsidiaries of Korean companies, etc. ; Content: Eligible Transaction, Details: Open-account export transactions based on long-term supply contracts or individual purchase orders ; Content: Eligible Receivables, Details: One factor system : payment terms up to 6 months (up to 1 year depending of the buyer's credit rating) Two factor system : payment terms up to 6 months ; Content: Disbursement Method, Details: Purchase of receivables as they arise, within the revolving credit limit set for individual export contracts ; Content: Discount Rate, Details: One factor system : LIBOR + Spread Additional fee charged under two-factor system ; Content: Security, Details: Unsecured
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Advantages of Factoring ; KMF assess and establish credit limits for Debtors introduced by the Client ; The Client signs the factoring contract and Introductory Letter which is sent to each Debtor to inform of the Client's decision to sell its receivables to KMF ; The Client sells its receivables to KMF as they come into existence. Each Debtor is notified of the transfer of receivables
Content: Beneficiaries, Details: Creditworthy companies with at least 1 year of experience producing or exporting the product or other similar product, or those that have a history of at least 1 transaction with the current buyer ; Content: Eligible Transaction, Details: Export transactions based on irrevocable L/Cs issued or confirmed by foreign banks in countries above a certain credit score assigned by the Bank, or non-L/C based export transactions (including intermediary trade) backed by payment guarantees of foreign banks ; Content: Currency, Details: USD, JPY, EUR, etc. ; Content: Eligible Amount, Details: US$10,000 to US$50,000,000 ; Content: Repayment Term, Details: At least 30 days, less than 2 years ; Content: Discount Rate, Details: Up to 1 year : LIBOR + spread Up to 2 year : SWAP RATE + spread ; Content: Security, Details: Unsecured
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Structured Trade Finance for Trade with Korean Companies Factoring Export Factoring A form of trade financing provided by purchasing trade bills which occur from open-account export...
Supply chain finance (or supply chain financing , abbreviated to SCF) is a form of financial transaction initiated by the ordering party (a business customer) in order to help its suppliers to finance their receivables more easily and at a lower interest rate than the rate available commer...
factoring, in finance, the selling of accounts receivable on a contract basis by the business holding them—in order to obtain cash payment of the accounts before their actual due date—to an agency known as a factor. The factor then assumes full responsibility for credit analysis of new accounts, payments collection, and credit losses. Factoring differs from borrowing in that the accounts receivable and the responsibility for their collection are actually sold rather than merely offered as loan collateral. Factoring is employed especially by ...
Looking for finance options? Discover the benefits of factoring and trade finance to help grow your business.