Export finance and export factoring

Export finance in the form of factoring for exports is a flexible method of improving cash flow for UK companies selling overseas by releasing cash tied up in export sales invoices and this type of funding is available in a number of different guises from various factoring companies with the demand looking set to increase as the Government has been urging UK companies to export more.
Export Finance for Expansion of Overseas Sales
Many factoring companies use the services of a worldwide network of factoring companies to handle export factoring whereby the client submits his sales invoices as usual to his UK factoring company who will then pass them for processing and collection on to an international correspondent factoring company in the customer’s country.

This sort of facility has the benefit of local knowledge and expertise for the administration and collection of the debt but has the disadvantage of having an extra link in the chain which sometimes means that it can be difficult to get feedback.

Other UK factoring companies are subsidiaries of pan European or worldwide groups and use their own overseas networks for the collection of export debts but this has the distinct disadvantage of only being workable if the UK factoring company actually has a group member in the customer’s country.

The majority of UK independent factoring companies will handle export sales from their UK offices but will readily admit that they aren’t really geared up for volume or countries outside Western Europe and therefore they tend to only be interested in funding export debts if they are only a small proportion of the company’s total sales.

The Independent Export Factoring Facility

One or two of the independents have fully fledged export factoring departments in the UK where they are happy to offer facilities to exporters anywhere in the world (subject to credit and political risk) and have the multi lingual skills and systems to make this feasible.

Factoring Solutions are one of the longest established specialist factoring brokers around and are completely independent so whichever form of export finance is the most appropriate for your company we would be more than happy to advise so for an informal chat, please contact Factoring Solutions without any obligation whatsoever.

What do you think?