Definition

The Two-Factor System

Export Factoring, or Cross-border Factoring, is a financial service for exporters, generally undertaken on the basis of the so-called Two-Factor system.

Here, one IF-Group company acts as the Export Factor - dealing with financing, credit management, sales ledger accounting, or a combination of these services - in the supplier's country. A second Member, the Import Factor, handles credit cover and collection in the buyer's territory.

The Advantages of Cooperation

The established business relationship between Export and Import Factors, brought about through their membership of IF-Group, enables them to work effectively together in offering a total service to the end-user:

• Invoice collection - the collection of payments and where necessary, legal action is undertaken by the Import Factor. Being present in the country of the importer, speaking the same language and understanding the local customs and habits puts the Import Factor in the best position to provide a professional and effective service.
• Debtor credit rating - This is handled by the Import Factor's local financial experts, on the basis of actual up-to-date information obtained locally.
• Fast communications - To ensure optimal efficiency in the Two-Factor system, all information flows between Export Factor and Import Factor are clearly defined and handled by rapid electronic exchange