Cross-border factoring

Cross-border factoring

Concluding a transaction by a network of factors across borders. The exporter's factor can contact correspondent factors in other countries to handle the collection of accounts receivable.

Cross-Border Factoring

Concluding an international transaction by using a more than factor; that is, an institution that buys others institutions' accounts receivable. In this situation, an exporter sells its accounts receivable to a factor, which then contacts other factoring institutions in order to collect what was owed to the exporter. This helps the exporting business because it may divest itself of credit risk (and perhaps currency risk as well).
References in periodicals archive ?
With more than 400 member companies worldwide, FCI offers a unique network for cooperation in cross-border factoring.
This is, in part, thanks to the development of the model law on factoring by Afreximbank, the removal of burdensome stamp duty tax, the development of inclusive policies at the central bank level to promote and support financing to SMEs through factoring, and the push for development of cross-border factoring, he added.
Cross-border factoring is available through a small set of banks and factoring houses in the U.
A further use is for small firms that are considering a move into export markets for the first time, where cross-border factoring could reduce the initial payment obstacles that are often faced.