Port communicationFactoring as a common financing method，Already widely known by enterprises。but，Hong Kong Xintong - found that when factoring further communicated business with enterprises，Many companies often repeatedly ask questions about certain factors of factoring business details.。here，Hong Kong Xintong-selected several common customer questions，and answer。
It should be noted that，The following questions and answers are only for general situations；In the development of specific factoring business，The response to a certain question may vary depending on the customer's qualifications、It varies by industry。Let’s learn together! Q1:What kind of companies are suitable for factoring?
A1：Enterprises use credit sales for external sales，There is a certain account period、Able to confirm the formation of accounts receivable，If your business wants to speed up cash flow、Beautify reports, etc.，Factoring business can be carried out based on accounts receivable。Q2：Is it after factoring?，Will customers not have to bear the risk of unrecoverable accounts receivable? A2：Factoring services are divided into factoring with recourse and factoring without recourse.。
As the name suggests, the former，The factor can pursue claims from the customer，So the customer doesn't”sell out”risk，If bad debts occur in accounts receivable，The factoring chamber will pursue the corresponding factoring financing from the customer。
for the latter，The factor assumes the buyer’s credit risk，If accounts receivable are legal and valid，No rights defects，No commercial disputes occurred，Factors must fulfill guarantee payment responsibilities，Of course, we won’t ask customers for any recourse；so，Under non-recourse factoring，The customer is sold out of credit risk，But not all risks。Q3：If non-recourse factoring is not about selling out all risks，So，The risk to customers is still very high，Is it right?
A3：Products involving underwritten risks generally cannot sell out all risks.。The insurer has an exemption clause，All policyholders have certain obligations。For outright factoring，If the accounts receivable transferred by the seller are complete and valid，No rights defects，The transfer notification procedure is legal and valid，Factorers become new creditors，The right to collect payment from the buyer (whether or not it is received)。As long as there are no commercial disputes，Non-recourse factoring is equivalent to selling out all risks。
therefore，Normally，Factoring or other insurance products do not cover commercial disputes，But usually factoring companies will help customers reduce the risk of commercial disputes。Q4：When handling explicit factoring financing business, the buyer must be notified，The buyer will think the seller is strapped for cash，Is it possible to handle secret factoring without notifying the buyer? A4：It’s not surprising that sellers have such concerns，But it’s really too much to worry about.。
The current supply chain model is developed，Credit transactions on the chain are very common，There is a large amount of accounts receivable。In order to revitalize assets receivable，Effectively invest capital into the production process，Enable the seller to provide satisfactory goods to the buyer in a timely manner，The use of factoring financing is common practice，It also provides guarantee for the rapid operation of the supply chain.。
The reality is，Some customers operate secret factoring business，without notifying buyer，Use indirect reimbursement，more than this，False trade background，The project itself is equivalent to evaluation based on the seller's own ability to collect payment.，The risk is great。therefore，Lock the buyer’s payment path，Is operating factoring business、An effective means to achieve risk mitigation。so，In addition to being very confident in the seller’s creditworthiness，In principle, it is not recommended to operate dark factoring。
Q5：The buyer pays all the way to the seller's account in a bank，If you cooperate with a factoring company，After operating factoring business，Can the seller receive payment first and then repay the factoring financing? A5：Taking into account the self-compensation of trade，Factoring business controls the source of repayment，Weakening the guarantee to the seller
Require
。so，The repayment path must be locked，Achieve the role of risk mitigation。Regulatory agencies have always been very strict in this regard.
Require
。
Q6：Can accounts receivable be split among different factoring companies for factoring? A6：Generally speaking，"All accounts receivable from the same buyer" must be factored through the same factoring provider。This facilitates the centralized management of accounts by factoring companies.。certainly，In principle, there is no restriction on "different buyers" handling business with different factoring companies.。Q7：What are the factoring services?
cost
? Sounds like the cost is more expensive than a working capital loan?
A7：The charges for factoring business mainly include factoring fees and financing interest.。Funding costs of factoring services and working capital loans are not comparable。Factoring service is a collection of accounts receivable financing、Collection、guarantee、Comprehensive financial services with integrated management，Its assessment of enterprises is based on the ability to collect receivables under trade.，That is, the buyer’s ability to pay and perform the contract。Normally，Do not impose strict requirements on corporate mortgages and pledges
Require
。
Working capital loans only provide business financing，Its assessment of a company is based on its own operations and cash flow.，No trade background is required
Require
，Normally，There are mortgages and pledges for enterprises
Require
。so，different products，The scope of its use is also different，Their financing costs are not comparable。
in addition，The factoring financing period corresponds to the collection period of accounts receivable.，A few months to half a year，Customers can borrow and repay at any time according to their own financial arrangements.，More flexible to use。Q8：How factoring helps businesses”beautify”Financial statements? A8：Normally，Outright factoring (non-recourse factoring) means that the buyer's factor guarantees the buyer's payment risk，valid for legal、Buyout of accounts receivable without title defects。
for seller，Its accounting record is "debit"：Monetary funds，loan：accounts receivable"，This reduces the seller's accounts receivable.，Convert into monetary funds，Improved asset liquidity，Improved operating cash flow，Achieve the purpose of beautifying financial statements。at present，Some companies also transfer accounts receivable to factoring companies，At the same time, the drawer agreement is used to promise to repurchase accounts receivable to reduce the accounts receivable on the account.，To achieve the purpose of improving operating cash flow。
However, this model carries great legal risks，Discouraged。For outright factoring，Factors should be based on real trade background，Based on an assessment of the buyer’s ability to pay and perform，Allow sellers to operate non-recourse factoring business。If you still want to know more about this aspect，Welcome to consult Hong Kong Xintong at any time!
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