International Factoring
International factoring is the purchase of claiming rights over trade receivables from the merchandisers whose business counterparts (purchasers) are situated overseas.
International factoring helps facilitate the import and export related business as it provides more flexibility to the operation as well as creating confidence between importer and exporter.
International factoring can be divided into 2 main categories as follows:
- Import Factoring
Import factoring is a service of guarantee provision on the purchaser’s (importer) payment capability to the seller overseas pursuant to the agreed terms.
In case where the importer fails to make payment for goods, the import factoring service provider, as a guarantor, will be obliged to make payment on behalf of the importer.
- Export Factoring
Export factoring is a service of guarantee provision to the exporter on its receivables as well as verification of importer’s credit and collection guarantee
to the exporter in case where the importer could not make payment for goods. It also includes the provision of working capital to the exporter if the exporter wishes
to sell its trade receivables via the assignment of claiming rights to the Subsidiary, a factoring service provider.
In addition, the Subsidiary is a member of the Factors Chain International (“FCI”), which has more than 180 corporate members in 54 countries worldwide.
FCI is an association incorporated by collaboration amongst factoring service provider members around the world with the purpose to bring the international factoring and related financial services
to the same standard. The benefits to the Subsidiary as a member of FCI include broader coverage of factoring service both domestically and overseas, financial product differentiation,
exchange of information and coordination among factoring service providers worldwide and transferal of information technology amongst member countries.
Also, the Subsidiary is a member of Thai Factors Association (“TFA”) comprising 10 corporate members, most of which providing factoring services in Thailand.
As a member firm, the Subsidiary will be assisted by TFA to support and coordinate with other members.
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