Research On The Application Of Reverse Factoring Asset Securitization

In recent years,relevant policies of Supply Chain Finance have been introduced one after another,and the top-level design has been gradually improved.Supply Chain Financial ABS has ushered in important development opportunities,among which Reverse Factoring ABS,an innovative financing channel,has attracted widespread attention in the market.Driven by the support of national policies and the market demand,Reverse Factoring ABS has begun to emerge.It has become a reality to rely on the high credit level of large enterprises to finance at a lower cost for SMEs.This is of great significance for activating the receivables on the accounts of SMEs and alleviating the problem of " financing difficulties" and promoting the development of the substantial economy.In the process of collecting relevant research data,I found that the existing research on Supply Chain Finance and Reverse Factoring ABS mainly explored the financing advantages from the perspective of upstream SMEs,and seldom focus on the core enterprise.Based on the above findings,in addition to the discussion of upstream suppliers as financiers,the research content of this paper is more important to analyze: what is the reason for core enterprises to actively apply for Reverse Factoring ABS for upstream suppliers,and what benefits have core enterprises gained from it.On the basis of summarizing literatures and theories,this paper introduces the transaction structure and characteristics of Reverse Factoring ABS,and analyzes the current situation of Reverse Factoring ABS in China from the perspectives of realistic demand,interest-drive and policy support.The case studied in this paper is “Ping An Yi Kun 2017 – 1”,in which the core enterprise is Xincheng Holding Group Co.,Ltd.,whose growth rate is in the forefront of the real estate industry in the past two years.This paper analyzes the motivation and effect of the special plan from the perspective of upstream suppliers and the core enterprise.The motivation focuses on the financing needs of upstream suppliers and the financial status of the core enterprise,and the effect analyzes the financial and non-financial performance of upstream suppliers and the core enterprise.The event study is used to study the market reaction brought by the item to the core enterprise.Finally,the paper also analyzes the risk control of this item.The conclusions of this paper are as follows:(1)Reverse Factoring ABS is a financing method suitable for the current economic environment.Upstream suppliers have a large amount of receivables from the core enterprise and have financing needs.The core enterprise has higher credit level and financial ability,which is the prerequisite for Reverse Factoring ABS.(2)For upstream suppliers,Reverse Factoring ABS enables them to utilize the high credit level of the core enterprise to achieve financing at a lower cost than general bank loans,thus effectively improving the use efficiency of enterprise funds and avoiding unfavorable results due to insufficient cash flow.(3)For the core enterprise,leading Reverse Factoring ABS to help upstream suppliers to raise funds,on the one hand,appropriately delay in repayment of accounts payable and improve the capital utilization,and in the short term will bring positive market response and wealth effect to the core enterprise;On the other hand,it can achieve win-win cooperation in the supply chain,promote the stability and development of the entire supply chain,and improve the comprehensive competitiveness of the enterprise.In addition,it is a relatively good choice for the core enterprise to choose a more differentiated factoring company to carry out Reverse Factoring ABS for upstream suppliers.(4)For the risks in Reverse Factoring ABS,them can be controlled and prevented through effective credit enhancement mechanism,strict standard of pooling,comprehensive screening of receivables,setting up trigger mechanisms for early settlement and redemption,etc.