Domestic Factoring refers to a short-term finance whereby the seller (our customer), under domestic sales on open account, assigns accounts receivable generated under sales contract to CEXIM. After obtaining the buyer’s acknowledgment to the assignment, CEXIM will provide you with a series of services including account receivable discounting, receivables ledgering, and protection against bad debts.

Benefits for Sellers

Enhancing Competitiveness: The seller is able to provide its existing or new customers with more competitive payment term of open account, thus expanding domestic market and increasing business opportunities;

Protection Against Risks: The buyer’s credit risk is passed on to CEXIM and the seller’s credit facility is not occupied under non-recourse factoring;

Saving Administration Cost:  Without workload in asset management and collection of accounts receivable, administration costs can be saved greatly with the reduced demand in both labor and processing time;

Simple Formalities: Formalities of domestic factoring are simpler and easier than that of other finance methods;

Providing Finance Facilities: CEXIM provides the seller with finance facilities through discounting the receivables, to relieve the problem of the seller's working capital tied up in accounts receivable, accelerate the seller’s cash flow, and financially support the expansion of business between the seller and the buyer;

Optimizing Financial Structure: Because CEXIM buys out accounts receivable, the seller is able to improve its financial statements.

When Do You Choose Domestic Factoring?

Domestic sales of goods or service on open account not exceeding 360days;

Worrying about the buyer’s credit risk or having an extremely low accounts receivable turnover, the seller wishes to control the risk and expand the business;

The buyer is unwilling or unable to issue a documentary credit, limiting the increase of the seller’s trade volume;

The buyer tends to cooperate with other suppliers due to the exporter’s unwillingness to open account;

Both the seller and the buyer wish to remove the burdens of account receivable administration and collection.

Tips

No Collateral and Indemnity: With the buyer’s acknowledgment to the assignment of accounts receivable, the seller does not have to obtain a credit rating and credit line in CEXIM or provide CEXIM with any collateral or indemnity; 

No Recourse: The buyer’s non-payment risk is passed to CEXIM under non-recourse account receivable discounting, so the seller is free from the buyer’s non-payment risk and obtains a better financial statement;

No Barrier: Assignment formalities for each account receivable can be completed independently, so you do not have to assign all the accounts receivable;

High Amount of Financing: The amount of financing can be up to 100% of the invoice value under non-recourse domestic factoring.