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International Factoring Services

As a leading figure in the international trade and finance industry, J&D Financial leverages its expertise by offering international factoring services to clients operating here and overseas.

Are you Eligible for Factoring?

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Foreign Seller to U.S. Buyer: Import/Export Financing Example

A Japanese manufacturer and distributor of bathroom fixtures sells container loads to creditworthy American buyers. After J&D Financial has received the invoices and bills of lading to confirm that the goods have been shipped to the U.S., we will send the funds to the Japanese company.

U.S. Seller to Foreign Buyer: Export Finance Transaction Example

An American food and beverage manufacturer sells its products to a distributor in the UK. Goods are transported by air and all invoices are covered by credit insurance. When the distributor receives the products, the funds are sent to pay the manufacturer. 60 to 90 days later, the distributor from the UK will make payment sending funds to J&D Financial.

We set ourselves apart from other providers by delivering much more than financing to U.S. sellers to foreign buyers and vice versa; we are also a full-service international factor firm that offers assistance with regards to the following:

  1. International Factoring Fees: Aside from charging you fair factoring fees and interest, we also consider factors such as your annual sales volume, average invoice size, and creditworthiness of your account debtors when pricing your deal. Please visit the Factoring Fees page for more information.
  2. Factoring Advance Rates: Advance rates for international invoice factoring services can be as high as 80% of the gross invoice value. For new clients we provide the advance upon receipt and acceptance of the goods in the U.S. However, we can also offer a partial advance as soon as the shipment (bill of lading) with the balance has been received and accepted by the buyer in certain situations.
  3. New U.S. and overseas clients can also benefit from the following considerations for international factoring export finance advance rates:
  • An example would be : 50% advance less factoring fees upon receipt of ocean bills of lading and all necessary documents when a representative from the buyer’s country has checked the goods on their own.
  • Funding for the balance of the full export finance advance (30% of the 80% advance) upon arrival and delivery of goods, and as soon as the buyer has signed our Verification and Acceptance form, which confirms receipt of the goods without disputes or offsets.

Note: in some situations we may require a third party such as SGS to inspect the goods before they are shipped. This is de rigeur among international factoring companies.

Consignment of Shipping Documents: Most foreign companies typically sell goods Free on Board (FOB) port of shipment. In such arrangements, our international factoring policy will proceed in the following manner:

  • The client shall consign the goods to J&D Financial, for the account of the buyer, indicated as the notify party on the bill of lading.
  • The client shall provide J&D Financial all the original documents including: the purchase order from the buyer (on the buyer's letterhead), your invoice to the buyer, ocean bill of lading, packing slips, and inspection certificate if applicable.
  • Upon receipt of the original documents, J&D Financial shall notify the client's customer and deliver the documents to them. From thereon, the buyer shall be responsible for processing and delivering the goods to their warehouse, as well as all expenses such bills for ocean or air transport and custom clearances.

Please contact us for further inquiries on shipping terms or to request similar arrangements.

Credit Lines for Buyers and Credit Insurance

  • J&D Financial typically does its own credit checking and self-insures its buyers. After the buyers have been cleared, we will provide our clients a credit line for each buyer, which is the amount we will be responsible for in case the buyer fails to deliver payment. Depending on the buyer and your total receivables, we may consider additional receivables more than the credit line. These will be at your risk in the event of non-payment.
  • J&D Financial may choose to purchase credit insurance from a third party if we deem the buyer(s) not creditworthy or have payment terms higher than anticipated. The cost incurred by the third party insurer will be usually credited as an additional 1% + - on the invoice face value.
  • The client may also choose to purchase credit insurance from a third party insurer approved or endorsed by J&D Financial, provided we are stated as the beneficiary. Take note that initial insurance premiums, which are calculated as a percentage of annual expected sales and related to outstanding credit lines, can range from $5,000 to $10,000 upfront. Premium percentages can be anywhere from 0.35 to 1.25% on the gross value of the factoring invoice.
  • Export receivables pledged to other lenders: Because J&D Financial is in charge of factoring your receivables, we need to be acknowledged as such. Thus, we cannot accept export factoring invoices owned or pledged to another company as this might pose a risk to the firm that does the factoring. International best practices also discourage the use of similar strategies.
  • The client's receivables must be free and clear before they can be factored by J&D Financial. Should they possess any liens or loans against them, the current lender must be willing to cooperate and put J&D Financial in the primary position on all foreign receivables before they can be factored, also known as an intercreditor agreement. If you are a foreign firm selling to US buyers the assistance of foreign legal counsel to represent J&D Financial must also be sought, with the cost shouldered by the client. This ensures that all export receivables from a foreign country have no liens, pledges, encumbrances, or loans against them that may render the international factor null and void.
  • Furthermore, the foreign attorney must file the documents under the client's country to publicly acknowledge that they have been handled by J&D Financial and cannot be impeded by another financial or legal entity. We advise our clients to provide us with the names of three attorneys from their respective countries, preferably those with experience in international factoring.

Companies that are interested in doing business within the United States using international factoring are well advised to read our Frequently Asked Questions before proceeding. We have a long client list that spans a full range of industries, and our references among clients is second to none. J & D Financial also offers factoring services for high-risk deals, such as perishable goods, construction, and start-ups.