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Accounts Receivable Financing - A Case Study of Cross-Strait Market
Abstract
With the increase in assets along the basic supply chain, accounts receivable
financing is increasingly dominating small- to medium-size enterprise (SME) supply
chain finance. For the purpose of accounts receivable financing, an enterprise can obtain
cash in advance by transferring its rights to the earnings of cash flows from a legal
product that is subsequently sold to investors. In addition, accounts receivable financing
also satisfies an enterprise’s financing demand under various conditions and within
various terms. Therefore, accounts receivable financing has great application potential.
Accounts receivable factoring business is currently quite an established financing
channel in practical operations based on the concept of accounts receivable financing.
Accounts receivable factoring is called factoring in Mainland China, but in recent years
market capacity there has experienced rapid growth. As such, the discussion on this
sector’s current situation and development is mainly based on the cross-strait market in
this study, with management platforms in the cross-strait market introduced herein.
There is a big gap between capital demand and supply in the SEM financing
market, and SEMs have always been subject to financial pressure and to difficult and
costly financing. Accounts receivable factoring addresses the financing problem faced
by SEMs. As an innovative quality financing instrument, accounts receivable factoring
is expected to enjoy sustainable development in the cross-strait financial market in the
future.
Keywords: supply chain finance, accounts receivable financing, accounts receivable
factoring business, financial asset-backed securitization.
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