Factoring Abroad

International factoring deals

If you sell products or services to businesses outside the UK, factoring abroad can help you raise finance against those invoices to regulate your cash flow. Factoring abroad, also known as international factoring or export finance, reduces the complexity associated with overseas trading so you can capitalise on export opportunities. 

As an independent broker, we search the whole market to bring you the best international factoring quotes. Our experience means we know where to turn to find deals that match your business’s needs and we can even complete the finance applications on your behalf.

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What is factoring abroad?

Selling to international customers presents a real opportunity but it can also be financially challenging for many UK SMEs. Businesses that trade with overseas companies frequently offer extended payment terms - sometimes exceeding 120 days. That gap between shipping the goods and receiving payment can put a big strain on your cash flow and restrict your business’s growth. 

That’s where factoring abroad comes in. It allows you to release the money tied up in the invoices you send to business customers overseas. Rather than waiting for an international client to pay an invoice, you effectively sell the invoice to a factoring provider. They typically pay you 80-90% of the invoice’s value straight away. You then receive the balance of the invoice when the client makes the payment, minus the finance provider’s fee. 

What are the benefits of factoring abroad?

In many ways, international factoring is similar to a domestic factoring agreement. However, there are also several specific benefits when you’re selling to businesses overseas, including:

• You can extend your sales network internationally without the risk.
• There are no worries about chasing late payments or understanding the cultural differences or legal implications of payment defaults in other countries.
• You can sell to overseas businesses without a deposit.
• Non-recourse factoring provides 100% protection from bad debts, as the finance provider accepts the loss for a default or non-payment.
• Credit control responsibilities pass to the factor, so you don’t have to worry about verifying the authenticity of a customer.
• You can offer longer payment terms, which are often expected in international trade.

There are also a few things to consider. Factoring abroad is typically more expensive than a domestic service due to the added complexity, so there will be a dent in your profit margins. The factor will also collect payments from customers on your behalf, which could potentially affect your relationships with them.

Is my business eligible for factoring abroad?

If you sell to businesses (B2B) overseas and your customers are creditworthy, international factoring could be an option for you. To apply, you’ll need to fill out an application, which we can do on your behalf, and provide financial statements for the last 12 months.

You could still be eligible for international factoring if you have an adverse credit rating, as it’s more reliant on the creditworthiness of your clients. Typically, there’s also no requirement to provide any security other than the invoice itself. 

Ready for funding? We’re here to help

At UK Business Finance, we bring you the best international factoring deals so you can trade successfully overseas without worrying about your cash flow. We do the hard work for you and there are no fees to pay or exclusivity contracts to sign. Use our tool to request a quote or get in touch to discuss your funding requirements with our team.

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