The Application Of Factoring In H Bank

Factoring has gradually become the major international trading settlement procedure in line with the popular settlement procedure of open account under current market, based on the debt-transfer of account receivable, financing, sales account management, collection, credit control and guarantee of bad debts. With the continuous expansion of China international trading, factoring has been introduced into China. However, the research of the operation model and risk control of factoring is still under progress in view of the late start and slow development of factoring business.Based on the introduction of the basic concepts of factoring, the article introduces the application of financing to small and medium enterprises ('SME's'). Factoring can not only improve the cash shortage of SME's, but also enhance the credit management of SME's. Meanwhile, it also explains the reason of promoting the factoring business in H Bank. Afterwards, the article points out the problems that H Bank has encountered when promoting factoring business and an example is analyzed combined with actual operation to specify how to apply the factoring and manage risk control, so as to solve the problems mentioned above. At last, the author raises some suggestions and methods on the problems on macro aspects and enterprise' own side, when promoting factoring.It is concluded that factoring is the new solution to solve the SME's financing problem. In practice, as long as we can fully understand the risk, together with the improving macro-environment and enterprise performance, the risk of factoring can be under control, and there is great prospect of factoring in China.