International Factoring for a Foreign Company

J&D Financial will do international factoring for a foreign company selling to a credit worthy U.S. buyer if you are a foreign firm operating anywhere in the world. We do international trade finance in the following general manner.

1. International Factoring Fees – International Trade Finance Fees will vary depending on your yearly sales volume, average invoice size, and credit worthiness of your account debtors. Please see Factoring Fees
   
   
2. Factoring Advance Rates – International trade finance advance rates can be as high as 80% of the gross invoice value. For new clients we will either make the advance upon receipt and acceptance of the goods by the buyer in the United Sates or we may make a partial advance upon shipment (bill of lading) with the balance upon receipt and acceptance of the goods from the buyer.
   If you are a new client and we decide upon a partial advance, we do international factoring export finance advance rates in the following manner:
   
   
   • In view of the fact that you are probably checking the goods by your own representative in your country, we will advance you export finance money in the beginning, 50% less factoring fees, upon receipt of ocean bills of lading and all necessary documents.
     
     
   • Once the goods arrive and are delivered to the buyer and the buyer signs off on our Verification and Acceptance form, we will fund you the balance of the full export finance advance (the 30% of the 80% advance). This form asks the buyer to sign and confirm they received the goods without any disputes or offsets. This protects us both in the event the buyer refuses to pay the invoice.
     
     
   • The partial funding will only be in effect for the first few test containers and if we have no problems with the quality and/or discrepancies, we will consider funding upon ocean bills of lading and other documents, the full 80% advance less factoring fees.
     
     
   • In some situations we may require outside inspection of goods by a third party (such as SGS, www.sgs.com) before the goods are shipped.
   
   
3. Consignment of Shipping Documents – Usually most foreign companies sell goods FOB port of shipment. If this is the case, we do international factoring as follows:
   
   
   • You will consign the goods to J&D Financial, for the account of the BUYER (usually as the notify party on the bill of lading).
     
     
   • You will send us all the original documents which include a copy of the purchase order from the buyer (on buyer’s letterhead) ,your invoice to the buyer, ocean bill of lading, packing slips, inspection certificate, if any, directly to J&D Financial.
     
     
   • When we get the original documents we will notify your customer and we will endorse and send the documents to them. From thereon it is the buyer’s responsibility to process the goods and have it delivered to their warehouse. Your buyer is responsible for paying for all bills for transport (ocean or air), custom clearance, etc.
     If you have other shipping terms we can discuss a similar type arrangement with you.
   
   
4. Credit Lines for Buyers and Credit Insurance
   
   
   • We generally will do our own credit checking and will self insure the buyers. Upon our research of the buyers we will give you a credit line. This is the amount that J&D will be responsible for in the event of non payment from the buyer. Depending on the buyer and your overall receivables we may factor more than the credit line. These additional receivables would be at your risk in the event of non payment
     
     
   • However, if the buyer(s) are not credit worthy or require credit lines or payment terms that are higher than we feel comfortable with, we may have to purchase credit insurance from a third party insurer. If we purchase the insurance, the cost of this will be an additional 1 ¼ % on the invoice face value.
     
     
   • You may purchase the insurance, from a credit insurance company we approve, and make us the beneficiary. We can direct you to a broker in the U.S. that can do this for you if you wish. Initial premiums can cost from $5000 to $10,000 (USD) upfront .The premiums are calculated as a percentage of yearly expected sales and are related to the credit lines outstanding. Premium percentages range from .35% to 1.25 % on the gross value of the factoring invoice.
   
   
5. Are your export receivables pledged to another Lender? Since J&D is factoring your receivables we have to tell the financing world that we are the purchasers of your receivables. Your export factoring invoices can not be owned or pledged to any other third party.
   
   
   • You will have to hire a foreign legal counsel to represent J&D Financial, which YOU will pay for, to make certain that your export receivables have no liens, pledges, encumbrances or loans against them. The attorney will research your public records in your country to determine this. Your receivables must be free and clear before we can factor them. If your foreign export receivables have any loans against them, your present lender must put J&D Financial in a first position on your export receivables before we can factor them.
     
     
   • In addition, the attorney must file proper documents under your country specific laws to record publicly that your export receivables have been factored by J&D Financial and cannot be encumbered by any other financial or legal entity. They are the property of J&D Financial. We will want the names of three attorneys in your country who have experience in international transactions preferably international factoring. The attorney that we pick will probably want a retainer from you before we begin. You will be responsible.