What is factoring?

Factoring can be divided into international factoring and domestic factoring, in which domestic factoring is developed according to international factoring, which is also called international payment factoring or guaranteed payment agent. It refers to a comprehensive financial service business in which a factor provides exporters with at least two services such as credit insurance or bad debt guarantee, accounts receivable collection or management, trade financing, etc. through the acquisition of creditor's rights, and its core content is to provide export financing. Different from international factoring, domestic factoring agents, factoring applicants and commercial contract buyers are all domestic institutions.

Factoring is a comprehensive financial service integrating trade financing, commercial credit investigation, accounts receivable management and credit risk taking. Compared with the traditional settlement method, the advantage of factoring mainly lies in the financing function.