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Import Factoring

What is IMPORT FACTORING?

Import factoring is a service giving the client the possibility of obtaining a short-term buyer’s credit for goods he purchases from foreign suppliers without the need of issuing any kind of banker’s guarantee, letter of credit, bill of exchange, etc.

No financial charges towards the buyer arise from using this service as these are charged to the supplier. The only buyer obligation when using this service is to pay for the received goods directly to Factoring KB account.

Upon clients request Factoring KB can act as an intermediate party and provide factoring company in the country of the exporter with credit protection  in order to conclude a factoring agreement with client’s supplier.

IMPORT FACTORING Principle

  1. Foreign supplier provides goods to his buyer in the Czech Republic including an invoice which contains assignment clause informing the buyer that respective account receivable is assigned to Factoring KB.
  2. Supplier assigns the account receivable to a factoring company in his country (Export Factor); that assigns  such account receivable to Factoring KB.
  3. Export Factor pays the advance, usually in the amount of 70–90% of the account receivable value,  to the supplier.
  4. Buyer pays the full value of the account receivable  to Factoring KB account.
  5. Factoring KB remits the payment to Export Factor’s account.
  6. Upon payment receipt the account receivable account is settled between Export Factor and the supplier.

Import factoring principle

IMPORT FACTORING Advantages

  • payment for delivered goods made within 90 days upon goods receipt
  • buyer doesn’t have to request issuing of letter of credit or bank’s guarantee what results in the operating cost decrease
  • supplier obtains funding and future income guarantees

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