International commercial transaction have performed generally through the instrument known as the L/C which has proven effective In setting accounts between exporters and importers. From the viewpoint of cost and process, however, the L/C transaction ...
International commercial transaction have performed generally through the instrument known as the L/C which has proven effective In setting accounts between exporters and importers. From the viewpoint of cost and process, however, the L/C transaction incurs considerable burden to traders, particulary small and medium enterprises.
The objective of this study is to set an academic theory on international factoring transaction in Korea and to expand trade volume threrby after determining beneficial aspects of international factoring transactions for exports as well as imports.
Merits for exporters are as follows:
First, it can reduce the risk of payment default in the part of importers because the exporter factors guarantee the payment.
Second, business activities can be expanded as working capital is received in advance from exporters factors.
Third, more buyers can be induced as exporter factors furnish information about goods and markets.
Finally, and most importantly, the international factoring transaction should be newly provided as an indepentant export-import transaction in Foreign Trade Act.