The majority of large manufacturers engage the factoring services of export factors that participate in global networks. Members of these networks work through other factoring members located in the countries and regions where their manufacturer clients' products are being distributed and sold. This practice is a great benefit for high sales rates of these exported goods because local network members, as import factors, serve as the exporter's financial spokespersons. Since they are fluent in the local languages where product sales are being transacted, they also are well-informed concerning the business standing and credibility of local buyers. This arrangement is reassuring to the product manufacturer who is confident that overseas sales of products are being handled by competent, trustworthy sales partners. The import factor, in conjunction with the export factor, will also assume management of the manufacturer's collections and take responsibility for all associated credit risk.
The major services offered to manufacturers by international factoring companies include:
Typical samplings of U.S. manufacturing companies that export products for sale on international markets with the assistance of factoring agents usually have annual sales totaling between $5 million and $200 million. Often the exporting minimum sales amount for engaging the services of an export factor is $5 million. Currently, global factoring is also being employed as a financing option for managing accounts records of Fortune 1000 businesses and other large corporate entities engaged in international business. Many large exporters of products or services now realize what a powerful financial aid global factoring can be. With the aid of factoring, exporters can join many competitive international markets and greatly increase their business clients and buyers. They can also gain many valuable contacts and associates. In addition, they can increase global business activity and profits at no added risk.
Many large international manufacturers and business service providers engage the expert services of global factoring companies for A/R financing and to best facilitate their worldwide product sales. In addition, they benefit from the management of receivables collections and credit monitoring services of customer accounts by these factors. Another very important function of these factors is their ability to operate through a global factoring network that facilitates sales transactions worldwide in numerous different languages and currencies.