Reverse factoring – an innovative trade finance mechanism

With the growth of international trade, finding reliable and affordable financing mechanisms has become a challenge. Traditional options are not always sufficient and available for small and medium sized businesses. Here’s where reverse factoring comes into the scene. An article by capgemini-consulting.com gives an overview of this innovative trade finance mechanism: http://www.capgemini-consulting.com/blog/procurement-transformation-blog/2013/09/reverse-factoring-innovative-financing-to-strengthen

Study: reverse factoring as a new means of financing international trade

Reverse factoring could potentially provide between $255 billion to $280 billion of cross-border trade financing, or 20 to 25 percent of an industry’s accounts payable, according to the study of the UK’s Association of Chartered Certified Accountants (ACCA). Basically, reverse factoring means a process in which a seller accepts a discounted payment of an invoice Read More >

Alternative trade finance and its benefits for small- and medium-sized businesses

The main idea of trade finance is facilitating international trade. The advantage of trade finance is that it effectively covers importers’ cash flow needs in between the purchase and sale of the goods, and solves the working capital problem for the exporter. When it comes to offshore trading (as opposed to the domestic transactions), there Read More >