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Export Factoring is an excellent way of funding cashflow relating to international trade on open terms. It allows a business to smooth it’s cashflow, collect debts efficiently¬†and through the inclusion of debtor protection can reduce risk.

Most invoice factoring companies will want a credit insurance policy in place to ensure that the companies you are selling to are credit worthy.

However, not all invoice factoring companies will provide funding against exports and as such by choosing the wrong lender your funding can be severely restricted. If you have exports or are looking to grow your business in the international market it is important to choose the right invoice factoring company.

Some lenders claim to provide funding against exports via Factors Chain International (FCI) but while it is an excellent idea it remains cumbersome. Rather than taking the risk themselves they use a local factoring company to take the risk. If for example you have a debtor in Australia, they will use another FCI affiliated factoring company in Australia to provide the limit, take the risk and collect in the debt. This sounds like a good idea and I believe it is a good idea. The problem is that it is very slow when you are looking for a credit limit and can be cumbersome throughout.

In my opinion you want a UK based lender who will provide the funding and accept the risk themselves. If they require the sales to be credit insured then so be it.

By choosing either an invoiuce factoring or invoice discounting facility you can decide whether or not you require a credit control function. Some lenders will offer a service in variety of languages which can be very effective when collecting debts in countries that speak other languages.

If you require export factoring it is worth contacting Smart factoring Quotes to establish which lender will be best suited to your requirements.

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