EXPORTER S SOUK EVENT FOUR SEASONS 4/23/2015 1

Transcription

1 EXPORTER S SOUK EVENT FOUR SEASONS 4/23/2015 1

2 FACTORING Factoring is a financial transaction whereby a company sells its receivables to a Third Party (Factoring Company) at a discounted rate. Not a loan but rather the acquisition of your postdated account receivables. There are various types of factoring which include: Recourse Factoring Non Recourse Factoring International Factoring (Export/Import) Reverse Factoring 4/23/2015 2

3 INTERNATIONAL FACTORING The assignment of an Exporter s short term receivables to an Export Factor based on an international sale of goods or services. Involves 4 Key Players : Exporter Export Factor Importer Import Factor. 4/23/2015 3

4 TWO-FACTOR SYSTEM Sells G/S to an overseas buyer (Importer) & issues an invoice EXPORTER EF Upon delivery of goods/services, Signs Settles a factoring outstanding agreement balance with and the EF makes an advance payment assigns Exporter accountsafter receivable deducting to an interest of up to 80% of the total invoice s Export Factor & fees on the pre-financed amount value to the Exporter IMPORTER At maturity IF collects payment and swiftly transfers the amount to the EF. TWO-FACTOR SYSTEM IMPORT FACTOR EXPORT FACTOR EF Reassigns accounts receivable to an IF in the buyer s country Upon request, IF Conducts a credit analysis of Importer and collects payments on maturity date for an agreed fees 4/23/2015 4

5 THE ROLE OF THE IFG Dedicated to facilitating an environment for factoring companies to conduct cross-border transactions. Acts as a mediator between Import & Export factors during international trade transactions. Provides the IF Exchange software used for communication between factors in different countries. Regulates & rules over any disputes that stem from international transactions. 4/23/2015 5

6 THE BENEFITS OF INTERNATIONAL FACTORING FOR EXPORTERS Increased Cash Flow. Boost sales & opportunities in new & existing foreign markets. Ability to offer more competitive payment terms and gain a competitive advantage. Credit lines are in place for buyers, which speed up response time for orders and re-orders. 4/23/2015 6

7 THE BENEFITS OF INTERNATIONAL FACTORING FOR EXPORTERS Cash received upon delivery of Goods/Services. Eliminates the need for LCs & the time-consuming administrative burden it entails. Eliminates the process of collection at maturity. Liquidity to boost working capital. Domestic Factoring could also be beneficial to Exporters. 4/23/2015 7

8 THE BENEFITS OF INTERNATIONAL FACTORING FOR BUYERS Cash received upon delivery of Goods/Services. Eliminates the need for LCs & the time-consuming administrative burden it entails. Eliminates the process of collection at maturity. Liquidity to boost working capital. Domestic Factoring could also be beneficial to Exporters. 4/23/2015 8

9 FACTORING vs FORFEITING Both are mechanisms used in financing international trade transactions Both involve the acquirement of unpaid receivables. Factoring deals with receivables pertaining to ordinary goods Forfeiting is more suitable for capital goods, commodities and high value transactions. Factoring deals with short term receivables which are usually due within 90 days. Forfeiting involves receivables that have a maturity date of up to 5 years shifting to medium term loans. 4/23/2015 9

10 Source: IFG Market Shares 2013 Global Industry Annual Report IFG Total in Million Market Share GDP Penetration China 378, % 5.66 % UK and Ireland 329, % % France 200, % % Italy 178, % % Germany 171, % 6.48 % Spain 116, % % Japan 80, % 2.24 % USA 73, % 0.60 % Taiwan 73, % % Netherlands 52, % 8.94 % 4/23/

11 EVOLUTION OF WORLD FACTORING TURNOVER 1980 : +/- 50 billion 1990 : +/- 200 billion 2000 : +/- 600 billion 2013 : +/ billion The industry continues to grow faster than the World economy Source: IFG 4/23/

12 FACTORING IN THE WORLD 2013 North America 78 (3.5%) Europe (62%) Asia-Pacific 623 (29%) South America 100 (4.5%) Africa & Middle East 22 (1%) Source: IFG 4/23/

13 PRODUCTS GLOBAL INDUSTRY ANNUAL REPORT GIAR 2013 Reverse Factoring 6% Invoice Discounting 20% Recourse 51 % Non-Recourse 21 % Source: IFG Recourse 51 % Non-Recourse 21 % Invoice Discounting 20% Reverse Factoring 6% 4/23/

14 DOMESTIC INTERNATIONAL GLOBAL INDUSTRY ANNUAL REPORT GIAR 2013 Import 3 % Export 13 % Domestic 84 % Domestic 84 % Export 13 % Import 3 % Source: IFG 4/23/

15 THANK YOU Any Questions? 4/23/