We know that as an exporter you need to optimize the cycle between accounts payable and receivables. Hence, Factoring Bancolombia, a Bancolombia brand, offers Export Factoring, a financial solution that allows you to assign the credit documents issued to your foreign clients, thus improving your cash flow.
With supplier’s resource or responsibility
The exporter (supplier) assigns the economic rights of the invoice to Bancolombia and must pay upon breach on the payment by the importer (payer). Namely, the exporter is liable before Bancolombia for this obligation.
Through a factor abroad
Allows insure the portfolio credit risk through a factor located in the importers (payer) country. The factor must be a member, preferably, of the FCI* and the financial sector.
The exporter (supplier) is only liable for the payment of such obligation upon commercial dispute or fails to deliver the documentation required by the factor abroad for collection thereof.
*Factors Chain International is an organization that gathers factoring companies’ worldwide, the purpose of which is to introduce the concept of factoring in countries where this product is not known, and develop it through the two factors system.
If you are an exporter (supplier) you:
- Improve financial indicators due to a release upon working capital, thus improving cash flow.
- Create the opportunity to export larger volumes upon larger terms, as a means to increase competitiveness without increasing the risk.
- Does not limit the direct negotiation with your customers.
- Consolidate better commercial relations with your customers abroad.
- Reduce the risk upon exchange exposure.
- Receive advisory from our specialized sales team that will provide support upon business structuring and guidance on the operation of this product.
- Reduce portfolio management costs.
- Eliminate importers credit risk (on Export Factoring through a factor abroad); additionally, you may have a partner in the importers (payer) country that knows the language and knows how to perform factoring operations.
Allows your importer (payer) to:
- Consolidate the best commercial relations with your vendors.
- Adjust the import portfolio payment to the business productive cycle.
- Negotiate longer payment terms and imported amounts with the supplier.
- Avoid financial indebtedness; the credit document is kept as an account payable.
- Avoid any risk for your exporter (supplier upon modality of factor abroad).
- Maximum amount of disbursement: according to the Maximum Indebtedness Limit* approved to the exporter (supplier), and the quota approved by the factor abroad to cover payers credit risk abroad. The latter applies only to the factor abroad modality.
- Minimum term of the operation: 30 days.
- Maximum term of the operation: 180 days.
- Principal payment: single payment upon expiration of the credit document.
- Currency: applies only for credit documents issued in US dollars.
- Disbursement: may be performed in legal currency (prior monetization process) or foreign, upon customers choice.
- Conditions: form of payment upon document subject of factoring; the term and discount on prompt payment conditions shall be agreed with the exporter (supplier).
- Extensions: not allowed for this product.
- Prepayment: the discount is returned due to prompt payment non-accrued to the exporter (supplier).
- Commissions: the Export Factoring through a factor abroad has an additional cost, generated by the service delivered thereof. This commission is charged to the exporter upon 100% of the invoice, although it is discounted over a lower percentage.
- Other charges or deductions: the exporter (supplier) is liable for SWIFT transfer costs, which are deducted by Banks abroad upon cancellation of the obligations by the importer.
- Tax to financial transactions: factoring operations are exempt from payment of lien on financial transactions (4X1000), provided these are performed to the exporter compensation account, or through payment to a savings or current account or crossed check and restricted negotiability in favor of the exporter.
- Related costs: does not generate costs for consultations upon account or product statement, issuance of certificates, good standing, clarification letters, or any type of communication requested by the customer through the different channels offered by Bancolombia.
* Maximum Indebtedness Limit: Limit pursuant to the conditions agreed in the covenants, provided the requirements and procedures agreed for each one of the operations are met.
Rates and Fees
- The operation rates vary according to the segment and the risk quality both of the exporter as well as the subject of negotiation.
- The maximum rate of any factoring operation is determined by the discount percentage granted by the exporter (supplier) upon negotiation.
- The commissions charged for factors abroad vary between 0.4% to 1% depending of the country, risk and term of the invoice.
- The default rate is the maximum legally allowed.
How to Access Export Factoring
- Upon execution of the legal documents, you must agree the financial conditions with Bancolombia: rate, term, discount, form of disbursement and modality.
- Send to Bancolombia the documents supporting the operation:
- Letter of assignment of credit documents/relation of invoices.
- Copy of the credit document.
- Copy of the transportation document as evidence of merchandise shipment.
- Notification letter to the importer (payer) or acceptance letter, in case it is feasible to obtain it for Export Factoring with Resource.
- Cover letter to the importer (payer) upon Export Factoring through a factor abroad.
- The documents required abroad for Export Factoring through a factor are subject to changes according to the particular demands of the factors abroad participating in the operation and assuming the importer credit risk.
- Bancolombia Export Factoring Agreement.
- Export Factoring Operational Precedure
- Promissory note.
- Money order Intruction letter.
- Circular letter: Factoring Bancolombia (C050) engagement information.
Information related to Export Factoring
The termination of this product is subject to the end of your contractual relation with Bancolombia. Generally, the contractual relation term is indefinite, and each party may terminate it through written notice delivered to the other party.
Grounds for Termination
Termination due the Maximum Indebtedness Limit (MIL):
- The MIL that was approved must be renewed each year; contact your commercial contact in Factoring Bancolombia, a Bancolombia brand.
- The MIL may be blocked for expiration of the term, inactivity, default or administrative or commercial decision.
- If the MIL has been inactive for 6 months or more, the request for reactivation should be made to the commercial contact in Factoring Bancolombia, a Bancolombia brand.
* Maximum Indebtedness Limit: Bancolombia would be willing to make operations for up to the amount of the MIL, per the conditions agreed in the covenants and provided the agreed requirements and procedures are fulfilled for each one of the operations.
¡Attain the financial efficiency needed for your business!
Export Factoring is an excellent option for exporters (suppliers) like you. Obtain liquidity, optimize financial indicators, and consolidate better relations with your customers, while they receive their products in competitive terms.
Please contact your commercial contact at Factoring Bancolombia, a Bancolombia Brand, in order to gather detailed information about this product.
Or call our national toll-free line 018000 930011.