Have the financial support from Gedesco for internationalizing your company In Gedesco we facilitate your commercial operations in foreign markets in more than 90 countries, with the experience of the best worldwide Factoring companies that assure collection of your sales, with quality service and agility in classifying the debtor.
International Factoring is a financial service aimed at exporting companies that wish to advance collection of their invoices, that way eliminating insolvency risk of the debtor. It includes diverse important valued performances for the exporting company.
The exporting company sells products or services to a company of another country, for which it issues an invoice that is pending settlement.
If it decides to anticipate its collection with Gedesco —using the International Factoring mode— the exporting company will send the documents related to the sales, to the so-called Export Factor (Gedesco in this case), who will pay the company the agreed percentage of the invoice, net of commissions and interests applied for anticipating the invoice.
To process collection of the mentioned invoice, Gedesco (Export Factor) will contact its correspondent in the country of the debtor (client of the exporting company), who will issue an opinion about the risk of the debtor and will process collection of the invoice and later payment to Gedesco.
In addition, in the non-recourse Factoring method, this correspondent (Import Factor) processes the reclamation in the case of a possible delay or a non-payment.
Graphically we can represent it like this:
- International Factoring allows the exporting company to anticipate the collection of invoices issued to its clients in other countries, which increases its cash-flow.
- Reduction of administrative load, because the documentary processing is done by Gedesco.
- Insolvency risk coverage. With the non-recourse method, the exporting company, in addition to collecting in advance, improves its balance ratio by reducing the frozen assets in the accounts of foreign clients.
- Possibility of only contracting the collections from its foreign clients, without the need of this being linked to financing; this offers the exporting company the peace-of-mind by externalising this service that sometimes can be complicated by time differences, by language, even market practices.
- Reduction of administrative processing time for collection of the invoices.
- Protection against non-payments.
- Collection process carried out by the Import Factor.
- Reduction of commercial risk of its client portfolio.
- Increase of cash-flow.
- Improvement of balance ratios.
For importing companies
If your company imports products from other countries, through FCI (Factors Chain International) we can also facilitate a credit rating of your company to your suppliers. We guarantee payment of the operation, avoiding the opening of Letters of Credit and facilitating the purchase.
Export Factoring is a service by means of which our clients can advance the collection of their sales made to clients located outside of Spain.
We support the growth of our clients and we know that exporting can mean an important part of their client portfolio, therefore from Gedesco we facilitate the anticipated collection of their invoices.
The main advantages of Export Factoring are as follows:
- Immediate financing of the invoices for sales made abroad.
- Speed in obtaining the risk lines of their clients and agile operability.
- Cash-flow improvement.
- Elimination of insolvency risk, if you opt for the without recourse option.
- Optimization of the balance ratios, because the sale is accounted as cash collection, choosing the non-recourse Factoring option.
- Externalization of the collection process.
- Ongoing monitoring of the client portfolio risk.
- Increase of growth capacity.
Who can use Export Factoring?
Export Factoring is aimed at those companies having clients outside of Spain, whichever the sector they operate.
Having this service is especially important to motivate companies during their growth, because they assure secure collection of their sales, being able to obtain more clients and open new markets.
Who intervene in an Export Factoring operation?
Client or invoice issuer, this is the company that has performed the works or delivered the goods abroad. This will be the company requesting the Export Factoring.
The debtor or company that has contracted the services or purchased the goods from the Spanish company, and therefore is obliged to payment of the invoice.
The National Factoring Company, also called Export Factoring, will be the one offering the Export Factoring to its clients in order to export and anticipate collection of their sales.
The Import Factoring Company, located in the country of the debtor, who will grant the risk limit of the same.
Import Factoring is a service through which international companies that sell goods to Spanish companies or institutions, could have risk coverage.
Gedesco approves credit limit for a specific international company buying in Spain, and we provide collection of accounts receivable, business information survey, and protection against bad debts for the company that is selling in Spain.
For foreign companies:
We are also active in Import factor. We cover the sales of international companies on Spanish buyers and this can be also interesting for your company when negotiating with your suppliers, which are requiring you for guaranties to protect their sale.
For Spanish companies:
For Spanish companies that are buying to international companies, having this service means that they can fully enjoy the benefits of sales on open account and buy more goods with limited capital.
The usual system is to use the Letter of Credit which is a complicated and expensive tool that do not protect you in case that goods are not delivered properly. You will be obliged to pay if the documents have been well negotiated.
And you will have to pay considerable commissions for the Letter of Credit, while in import factoring you are not going to pay anything. The supplier cover all the costs involved.
In factoring you, as buyer, will always have the possibility to declare commercial dispute (if justified) before paying, but on the other hand, the seller will have the payment protection on our side if everything has been delivered accordingly.
So that your supplier and you are protected.
Propose your supplier to stablish a factoring limit on you when he is asking for a payment protection.
How does it work?
- The Export Factor applies to Gedesco for a risk coverage.
- Gedesco evaluates the Spanish company or Institution, as we cover public entities too.
- Gedesco offers the risk coverage and approves the Export Factor’s request.
- The buyer (Spanish company) pays at maturity to Gedesco, and Gedesco transfers the funds to the Export Factor.
- The seller receives the payment through the Export Factor.
Interesting if you are a Correspondent from FCI:
Gedesco is able to provide you and your clients with coverage of the Spanish Public Sector entities.
It includes Central Government bodies and Regional bodies as well.
It will allow you and your clients to open a new factoring business line, closed up to now as no other correspondents cover this risk in Spain.
Gedesco will fulfil the PUA obligations according to the GRIF.