Historically, much of the world's international business was handled either on a pre-payment basis, cash on delivery or through letters of credit. In today's intensely competitive global economy, such terms are very unattractive to many buyers. If however an exporter decides to sell on Open Account terms, they need to be sure that will get paid and that they can finance the credit period they offer.

When doing business in the international marketplace, we all assume and hope that we get paid on time. However, we also know our expectations are not always met and the collection of receivables in foreign countries may bring with it many difficulties and involve widely varying procedures. Even if we can rely on fast and exact payment, we may still be faced with large amounts of money tied up in our accounts receivable: money that cannot be used in a productive way.

How can we guard against such uncertainties? And what level of protection is required?

Factoring is able to solve all of these problems, simply and simultaneously, by combining financing, credit risk protection and receivable collection in a comprehensive and competitive service.

Over the last 40 years, the worldwide Factoring industry has been essential in supporting the growth of global trade at both a domestic and international level. In many developing countries, suppliers and exporters have turned to Factoring as a way of financing their fast-growing industries.

While Factoring originated in specific market sectors such as garments and fabrics, it has developed strongly in many other sectors, including the manufacturing and service industries. In parallel with the increase in market diversity, Factoring has seen an equally rapid geographical evolution. This, combined with its growing use in cross-border trade, has made Factoring a major feature of today's business landscape.

Factoring is attractive to small and medium-sized enterprises, particularly during periods of rapid growth, because cash flow is preserved and risk eliminated. Larger organisations may also use Factoring services as a practical tool to provide additional working capital, by financing their domestic and international trade.

Factoring is clearly not an off-the-shelf product. Services are tailored to the specific needs of a client and defined to meet the unique requirements of each and every company.

Since its establishment in 1960, the members of IF-Group have been working together to provide their own clients with a safe a secure way of exporting on open account terms. IF-Group is unique in that it can now offer a number of options to an export factor in handling their clients' international business. The core product is the Two-Factor method, but there are alternatives including the Direct approach. For more detailed information on the Two-Factor method please click here.

For information on our members in your country, click here.