Export Factoring in Pakistan.

"Export Credit Re has introduced Export Factoring services in Pakistan, providing businesses with a robust solution to manage cash flow, reduce credit risk, and facilitate international trade."

How Export Factoring Works

A financial institution, or factor, purchases a company’s accounts receivable at a discounted rate, providing immediate cash to the business. The factor assumes the risk of non-payment by foreign buyers, ensuring exporters can focus on growth rather than collections.

Key Benefits of Export Factoring

1. Improve Cash Flow: Businesses receive immediate payment for their invoices instead of waiting for customers to pay.
2. Reduce Risk: Protects against non-payment by overseas customers, reducing exposure to credit risk.
3. Offer Better Terms: Enables businesses to provide open account terms to customers without impacting cash flow.
4. Facilitate Sales Growth: Allows businesses to work with larger, more diverse buyers and expand their customer base.
5. Easier Qualification: Small to mid-sized businesses can often qualify for export factoring without the need for collateral.
6. No Debt on Balance Sheet: Unlike traditional bank loans, export factoring doesn’t appear as debt, preserving a company’s financial standing.
7. Access Additional Services: Many factors provide value-added services such as sales ledger management, credit control, and expertise in language and local customs.

Considerations

While export factoring offers numerous advantages, it comes with costs and may have limited availability in developing markets. Businesses should evaluate their needs and consult experienced providers to determine if export factoring is the right solution.

Please send your query to: sm@eftcapital.org