What is factoring? Many people do not know how to answer this question, but some people are not aware of the factoring of accounts receivable insurance agency but factoring, and felt receivables management risk control is strict enough, how profitable ? Overall, we are very familiar with this industry, greatly accelerates this again for everyone to commercial factoring profit model and bank factoring similarities and differences make the following Detailed.
Factoring profit model
Business factoring company's main source of income consists of two parts:
Spreads, factoring company profits mainly from the spread. Factoring spreads approximately 3% -4%. If the factoring company background and competence better, get a higher interest rate. For accounts receivable financing , banks should charge interest on financing regulations of the People, the interest rate calculated in accordance with the schedule of the loan interest rate (including floating rate). Specific factoring financing rates according to the size of the actual advance amount factoring business, and with reference to prevailing market interest rates, and clearly defined in both the "factoring contract". Factoring financing annualized interest rate is generally 10% -15%, there is a high 17% -18% lower might achieve 8% -9%.
Factoring service commission, including the buyer's credit assessment , collection and accounts receivable management services. Rates depend on the nature of the transaction amount, financing and risk management services to provide specific content, typically 0.1% of the net Accounts receivable - 3%. Specific rates to the agreement signed by both parties, "factoring service contract" shall prevail.
And similar commercial factoring, factoring bank refers to a comprehensive financial services trade practices commercial banks to trade in the sale of goods or services on credit fashion design. The seller will transfer its accounts receivable sales contract entered into with the buyer arising to the bank, bank to provide trade financing, sales ledger management, accounts receivable collection, credit risk control and other comprehensive financial services. As a new financial services products, banking factoring business has changed the way traditional bank credit, increased funding delivery channels for banks to expand business customers and increase profits sources, improve credit asset structure are of great significance. In this mode, the factoring business is different is the main commercial bank as a business development.
Pledge of accounts receivable is an enterprise to have a real trading background and non-controversial, the bank recognized as accounts receivable receivables receivables right hypothecation to the bank for credit, but banks do not inherit the enterprise should short-term financing of receivables under any debt payments. Pledge of accounts receivable credit line of up to one year period, in principle, a single transaction period over six months. Pledge of accounts receivable is a financing guarantee subordinate way, you can carry out basic credit pledge guarantee in accounts receivable on, open a bank acceptances, letters of credit, bank guarantees and other financing business.
The difference between factoring and accounts receivable pledge loans
Although both accounts receivable as a source of repayment, but the nature of the difference between the two is very large. The basic difference between factoring and accounts receivable pledge that the factoring business by factoring companies and commercial banks, and accounts receivable pledge only be carried out by the bank.
First of all, from the service point of view, factoring refers to the supplier Factor (including banks) transfer of accounts receivable, regardless of whether its purpose in order to obtain financing, the need to meet at least one of the following functions: accounts receivable ledger management , debt collection, bad debt guarantee. That constitutes the necessary conditions to provide financing is not factoring business, if a seller only apply to the sales ledger management factoring or debt collection business, it would constitute factoring business. The pledge of accounts receivable refers to the bank accounts receivable as collateral businesses, provide loans to finance corporate finance services.
Secondly, from the point of view of effective elements, Due to our current law does not expressly provided for the factoring, factoring applicable law focused on the relevant provisions of the Contract Law of the assignment of claims. Article 80 provisions of contract law, "the transfer of the rights of creditors, it shall notify the debtor without the notice of the transfer to the debtor shall not become effective. Notice of assignment of rights may not be revoked, except with the consent of the assignee." Therefore, the assignment of claims without obtaining the consent of the debtor, but the need to notify the debtor, the creditor transfers can be set up. At present, China's factoring business of the transfer of accounts receivable has two operating modes, one debtor signature on the transfer of accounts receivable factoring business of confirmation, to confirm the fact of transfer of accounts receivable; another notary service that does not require confirmation of the debtor, the debtor witness Factor mailed a notice of assignment of credit and issue a written certificate by a notary public. The pledge of accounts receivable is registered as effective elements. After the bank and signed by both parties receivables pledge agreement, as long as the bank has been operating in the central bank pledge registration registration system, then the pledge relationship that is established. If a multi-pen pen registration receivable present simultaneously, press pledgee order of registration for repayment.
Again, from the point of view of the financial statements, by factoring business, companies in the internal accounting treatment, direct the performance of accounts receivable reduced cash increase (factoring financing for produce have recourse factoring financing, companies must disclose contingent liabilities), asset-liability ratio of direct business decreased. For accounts receivable secured loans business, as is the company in his own name to apply for loans to banks, and therefore in the financial statements, did not reduce accounts receivable, asset-liability ratio will rise accordingly.
Finally, whether the transfer of debt from the point of view, the factoring transaction, the factoring business to obtain credit, have the right to immediately charged directly factoring fee and get purchased receivables under any reward money. In the pledge of accounts receivable, the bank does not get credit, so unless the debtor to repay the principal debt default occurs, the creditors can not perform the pledge and pledge of no interest.
Bank factoring and factoring business to achieve win-win situation in competing in
Currently the bank is more focused on factoring financing, banks still have to strictly examine the creditworthiness of the seller at the time for business, and the need for sufficient collateral support, but also to take up its credit line at the bank, so the bank is more suitable for factoring enough mortgage and risk tolerance of large enterprises, small and medium business enterprises usually can not reach the bank's standards. The factoring business organizations are more focused on providing research, collection, management, settlement, financing, guarantees and a series of integrated services, more focused on a particular industry or field, providing more targeted services; pay more attention to the quality of accounts receivable buyers reputation, quality of goods, rather than the seller qualifications. Therefore, if companies pass on the debt factoring company by factoring in the form of business, we can achieve make an inventory of the receivable, improve the efficiency of its cash flow.
Commercial banks and factoring companies have different customer groups: the object bank factoring services are usually medium-sized customers, and factoring companies target business services is often true of small and medium micro enterprises. Therefore, commercial banks and factoring companies between seemingly competitive relationship, but in fact more complementary, the two can even be a win-win through cooperation in various fields.
First, the credit risk of outsourcing is an important direction of cooperation between the two. Although the major banks have been established in the financial services sector small and micro enterprises to provide services. However, due to asymmetric information and lack of human resources and other factors, many commercial banks are small micro-enterprise financial services sector is difficult to effectively conduct business in a short time. Business factoring company can provide credit risk by outsourcing services to help clients identify the bank's credit risk, as well as qualified enterprises to increase trust services.
Second, you can re-factoring cooperation in the field between commercial banks and factoring companies. Then factoring is essentially a re-assignment of credit, that company will transfer its rights and obligations after the debt due to trade receivables arising after the transfer to factoring companies, factoring companies and then transfer this to other factoring business (including Bank) behavior. Bank strict risk control system makes the quality of accounts receivable been re-transfer, factoring company's liquidity replenished, improved operating capacity, and the ability to further develop factoring business, making the real economy enterprises to get more service. In addition, banks can integrate their own resources to provide risk control for the various commercial factoring companies, channel development, talent introduction of a full range of integrated financial services.
Finally, banks and trust companies and other financial institutions can collaborate with business factoring company, issuing bank financial products and trust plan.
As a newly established company in the emerging industry, business factoring company's advantages and disadvantages are obvious: on the one hand, factoring companies use their own small and specialized features, can fully focus more familiar industry, risk evaluation criteria, operational means more flexible; but on the other hand, lack of factoring companies in terms of business channels, sources of funding, business experience, and risk management, but also restricted its subsequent development. The banks may serve as "intermediaries" some of the factoring business referrals to commercial factoring company, to carry out all-round cooperation in the funds business, channels, products, information technology, customer resources and other aspects of business factoring companies, factoring companies to solve business marketing channels issues such as inadequate.
By working with the business factoring company, the bank will credit risks on the one hand and small and medium-small micro-enterprise credit risk into the business of factoring companies, factoring companies leveraging commercial industry and customer familiarity and access, etc., banks can be found, screening, high-quality small and medium micro accumulated customer resources, improve the customer structure; on the other hand, business factoring company's registered capital and then factoring in the payment and other precipitation can also bring considerable savings for the bank.
Overall, commercial banks and factoring companies may jointly develop and fully play their role in promoting market diversification. Banks can take advantage of the convenience of financing, will provide financial support for the real economy. Business factoring company can drill services for SMEs, the factoring business of integrated financial services to better penetrate into the economic development of trade.
Conclusion: In case of commercial factoring historic opportunity for development
Bank Factoring suffered winter, but factoring business has thus ushered in a historic opportunity for development. And replacement of endogenous growth in the size of the accounting help business factoring in total factoring business increased significantly.
First, since the smaller single amount factoring, factoring preliminary review, daily monitoring heavier tasks, account management, risk control and capital return requires energy and devotion, more heavy burden on banks. Therefore, the development of third-party factoring services has become a prerequisite for the development of commercial factoring and urgent to solve SME financing. Improve third-party factoring services, financial innovation can be for banks to solve the financing problem for SMEs to open up new avenues; as for the bank to solve the factoring business in the early review, monitoring, mid, late of risk control and other issues, can to solve problems related to procedures, personnel, cost, frequency and amount of the bank. Saving the cost of banking. It can also provide the appropriate guarantees to banks, investment banks and minimize financial risk.
Second, compared with the bank focuses on financing factoring, business factoring institutions more focused on providing research, management, settlement, financing and a series of integrated services, focusing on a particular industry or field, providing more targeted services . In addition, with respect to the bank in terms of factoring, commercial accounts receivable factoring pay more attention to quality, buyer credit, quality goods, the seller rather than qualifications, and strive to achieve unsecured, and complete transfer of bad debt risk. At present, China credit system is more rigid, some banks factoring business performance and market demand is a big gap.
Therefore, business factoring can be carried out as a first-line bank factoring business, a clear division of labor, replace some of the functions of the bank factoring, also fill the market vacancy bank factoring, factoring large common eating cake booming.
In addition to replace some of the functions of the bank factoring, factoring business also has its own dedicated customer groups - small and medium enterprises. Bank customers factoring business with medium-sized enterprises, SMEs can not cover the risk exposure of accounts receivable, can not meet closely related to the majority of SMEs to enhance circulation efficiency requirements. Therefore, business factoring endogenous growth came from financial services focused SMEs.
According to the Bank of China statistics at present, SMEs account for more than 99% of the total number of Chinese enterprises, the contribution to GDP of more than 60%, the contribution of tax revenue over 50%, providing nearly 70% of the import and export trade, creating 80% of urban jobs. Business factoring can reach the breadth of customer base is self-evident. With the improvement of the degree of acceptance of factoring business, a mature business model, the credit evaluation process improvement, business scale is expected to erupt in recent years.