Along with trade insurance and export transaction credit insurance, international factoring can externalize the risks associated with credit transactions of foreign transactions. International factoring is a bank or factoring company guaranteeing exporters of open account transactions.
The factoring business is a service provided by a major Japanese bank and its subsidiary factoring company. If you ask a bank with a transaction, you should be able to get introduced to a representative of the factoring company immediately.
Take on the risk of collecting money through networks of banks, overseas banks, factoring companies, etc. The merit of factoring is that, unlike export transaction credit insurance, it can be said that the risk for each client can be externalized.
On the other hand, the disadvantage is that in the case of a basic type, it means transferring the receivables to a factoring company, and the client's consent is required. Even in the guarantee type, there is no transfer of debt, but consent is required.
In addition, factoring companies in overseas than Japan often make a final decision on whether to accept factoring or not, and even if multiple factoring companies are asked, the same conclusion may be reached.
