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How it works

A transaction follows a clear sequence between four parties: the exporter, the foreign buyer, the European factor and the credit insurer, with LTS at the centre.

Who does what

The exporter

Sells the goods, ships them, issues the invoice and assigns it to the factor.

The foreign buyer

Receives the goods and pays the invoice to the factor at maturity.

The factor

A European factoring operator with thirty years of experience. Buys the invoice, pays the advance, collects from the buyer.

The credit insurer

A AAA-rated European insurer. Approves a limit on each buyer and covers non-payment within it.

LTS

Selects and prepares the transaction, assesses the risk, coordinates the parties and follows the file to settlement.

Lebanese exporteryour company LTS — the brokerselects, prepares, monitors European factor30 years’ experience Client abroadpays in up to 90 days Credit insurerAAA-rated, European 1sells and invoices 2buys the invoice at a discount 3cash on day one 4covers buyer default 5pays at maturity prepares the file buyer insurance

The stages of a transaction

A typical set-up, not a template

The stages below describe a typical export factoring transaction. Each file is reviewed case by case: stages may be combined or re-ordered, and timings depend on the exporter, the buyer, the goods and the decisions of the factor and the credit insurer.

  1. Enquiry

    Day 1

    Establish quickly whether the business fits.

    The exporter describes the goods, the buyers, their countries, the usual invoice size and the payment terms through a short enquiry. LTS replies with a first view and, where the fit is clear, the list of documents needed. Nothing is signed or paid at this stage.

  2. Assessment of the exporter

    Typically 1–2 weeks

    Understand the company behind the invoices.

    LTS reviews the company’s legal standing, accounts, export history and payment record, using the Orion Scoring & Rating platform among its tools. The review checks that the business is genuine, the shipments recurrent and the documentation reliable, so that the factor and the insurer can rely on the file.

  3. Buyer limit from the credit insurer

    Typically 1–3 weeks

    Insure the foreign buyer before any shipment is financed.

    LTS submits each buyer to the credit insurer, which studies its creditworthiness and approves a limit: the maximum amount it will cover on that buyer. Only shipments within an approved limit are financed. The policy is issued in favour of the factor.

  4. Agreements

    Typically 1–2 weeks

    Put the legal framework in place once, for all future shipments.

    The exporter signs the factoring agreement with the factor and the brokerage agreement with LTS. The buyer is notified that its invoices are payable to the factor’s account. From then on, each new shipment to an approved buyer follows the same simple routine.

  5. Shipment and assignment

    For each shipment

    Turn a shipment into a financeable invoice.

    The exporter ships the goods and presents the invoice and the shipping documents. The invoice is assigned to the factor. Clean, complete documents are what allows the advance to be paid without delay.

  6. Advance

    Shortly after assignment

    Return cash to the exporter as soon as the goods leave.

    The factor pays the exporter an advance on the value of the approved invoice. The rest of the invoice is held until the buyer pays.

  7. Collection and settlement

    At the invoice due date

    Close the transaction cleanly.

    The buyer pays the full invoice to the factor at maturity. The factor releases the balance to the exporter, less the agreed fees. If the buyer fails to pay, the claim is handled under the credit insurance policy within the approved limit.

  8. Review and renewal

    Typically every 6–12 months

    Grow with the exporter’s business.

    Buyer limits and the exporter’s file are reviewed periodically. New buyers can be added at any time, following the same insurance approval.

Ready to start?

Tell us about your buyers and your shipments; we come back to you with a first view.

Start an enquiry