If you have already a few years under your belt of exporting and would like to build your international business while lowering the risk of default payments then you should consider Export Factoring.  Export Financing services are offered by most Banks in their Trade & Finance divisions or specialized financial firms (depending which country you reside).  With EF an exporter fills out an application form, submits foreign buyer invoices (accounts receivable) to a specialized financial institution, pays a facility fee, and is paid the value of the AR directly.  This type of service provides credit protection, working capital financing and by default collection services.  It essentially eliminates non-payment risk for an exporter while allowing for flexible payment options (open account terms).

Export Factoring can be negotiated on a Non-Recourse or Recourse basis.  Non-recourse export financing transfers all risk payment risk to the factoring entity while recourse EF is a partial transference. Depending upon the financial institution, factoring company and country that an exporter resides and risk assessment of the importer’s country and business profile these two options for Export Financing are available.