Q: Definition of factor, what does factoring mean

Factor refers to a financial institution that provides factoring services.

The factor provides at least two of the following services:

1) Financing.

The factor can receive the transferred receivables according to the seller's financial needs.

Immediately provide financing to the seller to assist the seller in solving the working capital.

Shortage issues. 2) Sales sub-account management.

According to the requirements of the seller, the factor can regularly send various statements to the seller on the status of accounts receivable, overdue accounts, aging analysis, etc.

Assist the seller in sales management.

3) Collection of accounts receivable.

The factor has professionals engaged in collection, and they will take reasonable, powerful and restrained measures according to the overdue time of the accounts receivable to assist the seller in the safety of the accounts.

4) Credit risk control and bad debt guarantee.

The factor can approve the credit limit for the buyer according to the seller's needs, and the factor provides 100% bad debts for the accounts receivable generated by the seller for the delivery of goods within the credit limit.

Guarantee. Extended Materials

To do factoring, there are conditions, that is, the following issues need to be paid attention to:

1. The buyer (importer) must have a good reputation or credit, so that the import factor can approve a certain credit limit for it, otherwise it is impossible to be accepted.

2. Continue to do factoring business.

Previously, a large amount of work such as these applications, credit assessments, and credit limit verification had to be done in the formal signing of export contracts.

3. Only when the export factor agrees with the exporter to do the factoring business, that is, after the export factor has approved the credit limit for the importer, can the foreign trade contract or shipment of goods be formally signed.

4. Pay attention to the use of the importer's credit line (balance status) and changes in its credit status. Maintain effective communication with export factors at all times.

5. Do not exceed the approved credit limit.

6. If you need financing, you need to know the interest rate in advance.

7. Another important issue that should be paid attention to when using factoring services is to understand the cost level of factoring. As far as is known, this is one of the main reasons why factoring is not widely adopted.

Factor refers to a financial institution that provides factoring services.

Scope of services of the factor:

1. Financing: The factor can provide financing to the seller immediately after receiving the transferred accounts receivable according to the seller's capital needs to assist the seller in solving the problem of liquidity shortage.

2. Sales account management: According to the seller's requirements, the factor can regularly send various statements to the seller to assist the seller in sales management.

3. Collection of accounts receivable: The factor has professionals engaged in collection, and they will take reasonable, powerful and restrained measures according to the overdue time of accounts receivable to assist the seller in the safety of accounts.

4. Credit risk control and bad debt guarantee: The factor can verify the credit limit for the buyer according to the seller's needs, and the factor provides 100% bad debt guarantee for the accounts receivable generated by the seller's delivery within the credit limit.

Factoring is also known as collection guarantee, which is a financial term. It means that Maimai buys its current or future accounts receivable arising from the sale of goods or service contracts signed with the buyer to the factor (financial institution), and the factor provides it with a series of services such as financing, buyer's credit evaluation, sales account management, credit risk guarantee, and account collection.

Factoring business is mainly divided into four categories according to the region, whether the debtor is notified, whether the creditor is pursued, and the business entity

1. International factoring and domestic factoring: Factoring business is divided into international factoring and domestic factoring according to the location of the creditor debtor. For exporters, in the development of international business, in order to recover funds in advance, you can do international factoring business, the common business model is export credit factoring, the exporter through the China Credit Insurance Company to insure the accounts receivable under the premise that the bank or factor through the factoring business to transfer accounts receivable creditor's rights, for the exporter to carry out the first financing.

2. Explicit factoring and implicit factoring: According to whether the debtor is notified, it is divided into explicit factoring and implicit factoring, and the qualification of creditors in the dark factoring business should be strengthened to prevent problems in later collection.

3. Recourse factoring and non-recourse factoring: According to whether to recourse to creditors, it is divided into recourse factoring and non-recourse factoring, and recourse factoring can allow creditors to repay funds or let creditors repurchase funds.

4. Bank factoring and commercial factoring: according to the business entity, it can be divided into bank factoring and commercial factoring.

Summary. Factoring is a type of financial service, which refers to the financing services provided by commercial factoring companies to small and medium-sized enterprises. A commercial factoring company helps the seller obtain funds by paying the buyer for the goods to meet the buyer's accounts payable.

Potato dismantling is a kind of financial service, which refers to the financing services provided by commercial factoring companies for small and medium-sized enterprises. The commercial factoring company helps the seller obtain funds to meet the buyer's accounts payable by paying the buyer's payment for the goods.

Factoring is a type of financial service, which refers to the financing services provided by commercial factoring companies to small and medium-sized enterprises. Commercial factoring helps the seller obtain funds to meet the buyer's accounts payable by paying the buyer the purchase price. The factoring company acts as a "guarantor" in this process, i.e. it will perform its obligations to the seller on behalf of the buyer.

Commercial factoring is a financial scheme based on the factoring contract signed between the factor and the first businessman. **A contract in which a merchant assigns or is about to form an account receivable (hereinafter referred to as "accounts receivable", or may refer to part of the accounts receivable depending on the context) to the factor in order to realize one or more of the functions of accounts receivable management, accounts receivable collection, and bad debt prevention. In recent years, with the increasingly fierce international competition, the international buyer's market has gradually formed.

The proportion of letters of credit settlements that are unfavorable to importers is decreasing year by year, and credit sales are becoming more and more popular.

Further information: Bank factoring is a kind of financial services including ** financing, commercial credit investigation, accounts receivable management and credit risk guarantee.

1.Factoring business in the banking industry can be divided into domestic insurance business and foreign factoring business. Internal factoring, also known as accounts receivable financing, refers to the business of transferring the receivables to the bank to obtain funds in advance after the bank has reviewed and approved the receivables.

2.According to different types of factoring business, it can be divided into buyout factoring business and repurchase factoring business. In factoring, the bank's audit center is mainly responsible for reviewing the debtor's ability to repay (i.e., the company that owes the company funds).

Foreign factoring is a financial product for import and export enterprises, and it is also a way for import and export enterprises to obtain funds in advance, and specific products include packaging loans, invoice discounting, etc.

3 At present, bank factoring pays more attention to financing. When handling business, banks still need to strictly investigate the credit status of the seller, and need sufficient collateral support and the bank's credit limit. As a result, bank factoring is more suitable for large enterprises with sufficient collateral and risk tolerance, and SMEs often do not meet the bank's standards.

4.The difference between factoring and accounts receivable pledged loans, although both are repaid on accounts receivable**, are very different in nature. The basic difference between a guarantee and a pledge of accounts receivable is that its business can be carried out by a commercial factoring company and a bank, while a pledge of accounts receivable is carried out by a bank only.

In terms of services, factoring refers to the transfer of accounts receivable to the factor by the first merchant (including the bank), regardless of whether its purpose is to obtain funds, at least one of the following functions must be achieved: account classification management, account collection, bad debt guarantee.

The provision of financing is not a necessary component of factoring, and if a seller only requires the factoring company to manage or collect debts, it is also factoring. Among them, the pledge of accounts receivable is a kind of financial service in which the bank provides financing loans to enterprises with accounts receivable as pledge.

Factoring, also known as collection and factoring, is a financial term that refers to the seller's current or future transfer of accounts receivable arising from the sales service contract with the buyer to the factor (financial institution that provides factoring services), and the factor provides it with a series of services such as financing, buyer's credit evaluation, sales account management, credit risk guarantee, and account collection.

It is an act of entrusting a third party (factor) to manage accounts receivable when the seller settles the payment by collection and credit in order to strengthen the management of accounts receivable and enhance liquidity.

Factor refers to a financial institution that provides factoring services.

Refers to a financial institution that provides factoring services. Including: ** financing, sales sub-account management, accounts receivable collection, credit risk control and bad debt guarantee.