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For the export factor
- Shifts collateral risk from pool of unknown foreign buyers to an import factor, such as Wells Fargo Capital Finance
- Often speeds up accounts receivable collections
- Payment goes directly to the import factor and not the seller
- Immediate access to accounts receivable collateral performance information
- Ability to generate fee income
- Import factor can make advances to the export factor
- Can increase client retention
- Often treated as an off-balance sheet item
For the exporter/seller
- Open account terms may help retain, win, or expand business
- Can provide credit protection against bad debt losses
- Eliminates collection efforts in different time zones and languages
- May quicken collection of accounts receivable
- Access to funding / working capital
- Converts costs from fixed to variable
- Includes accounts receivable management
- Open account terms may help retain, win, or expand business
- One cohesive relationship management team
- Eliminates collection efforts in different time zones and languages
- Optional funding against factored clients' accounts receivable
