Two-Factor Import Factoring means that, as applied by a foreign export factor who is instructed by the local exporter, CEXIM (the Import Factor) provides services such as collection of receivables, guarantee of payment and other accounts ledgering services.
Benefits for Importers
Saving Cost: It is often the case that the exporter is liable for factoring charges, so the importer obviates the cost of issuing documentary credits and processing documents; meanwhile, the factor provides accounts ledgering and collection of receivables service so as to relieve the burden on the importer's business and save administration costs;
Mitigating Risk: By arranging payment after goods inspection, the importer is prevented from the risks of the exporter’s fraud and default under documentary credit;
Facilitating a Deal: Credit risk of the importer is replaced by that of the import factor, thus resolving the exporter’s doubts and greatly enhancing the chance to sign a contract;
Increasing Profits: Since the importer’s payment is guaranteed for free, the importer is able to purchase more merchandise only with limited funds or even without occupying its working capital, thereby accelerating its cash flow as well as increasing its import volume and profits;
When Do You Choose Import Factoring?
The importer prefers open account to documentary credits.
It is unnecessary for an importer to submit an application for two-factor import factoring, and what the importer only needs to do is to request the exporter to contact CEXIM via a local export factor for an approved two-factor import factoring credit line;
If a dispute is raised between the seller and the buyer, the payment under approval will be suspended until the dispute is settled.