Singapore’s global trade sector is thriving, with total merchandise exports reaching S$674.5 billion in 2024. This growth includes a growing number of ambitious SMEs tapping into global markets to expand their customer base and boost revenue.
While global trade presents valuable opportunities, it also introduces challenges like delayed payments and uncertainty with foreign buyers. To help mitigate these risks in exporting, businesses may turn to export factoring.
Factoring allows B2B exporters to trade confidently across borders by instantly unlocking cash flow, reducing exposure to non-payment, and supporting the continuity of global trade activities.
Let’s take a closer look below at how export factoring benefits businesses engaged in international trade.
Export factoring is a financing solution that helps businesses unlock cash tied up in unpaid invoices issued to overseas buyers.
For example, when a company exports a bulk order of goods, the foreign buyer may sometimes need more time to pay the full amount. This can create a lot of uncertainty, especially for SMEs juggling operating costs, supplier payments, and the next shipment.
But with export factoring, the company can sell the invoice for those delivered goods to a factoring company. The factoring company will provide most of the invoice amount upfront and assume responsibility for collecting payment directly from the overseas buyer.
This practical arrangement makes it easier for businesses to manage international transactions.
Export factoring plays a strategic role in export success. It helps SMEs in global trade by:
Long payment cycles are a common challenge in global trade. While extended payment terms are often part of doing business, chasing international payments can be more difficult due to limited communication, time zone differences, and the physical distance that makes it harder to follow up.
For SMEs trying to keep operations running, having to wait for payments can put a real strain on cash flow.
Export factoring offers a way to ease that pressure. Instead of waiting weeks or months for payment, businesses can sell their invoice shortly after delivering the goods and receive most of the funds within a few working days.
This quick access to capital helps exporters stay financially agile by bridging payment gaps and avoiding disruptions caused by delayed overseas settlements.
Expanding into international markets requires more than just demand; it also takes the right operational support to manage overseas sales smoothly. For SMEs, export factoring helps provide that foundation by simplifying payment handling, invoice processing, and collections across borders.
With these processes supported externally, businesses can start trading in unfamiliar markets with greater confidence and less internal strain.
Since they no longer need to worry about collecting cross-border payments, they can do business more freely with global companies. Whether it’s a buyer in a new market or a larger overseas order, exporters can accept global opportunities knowing they have a reliable financing solution in place.
Overseas transactions often come with high upfront costs and limited visibility over when, or even if, payments will be made. Following up on unpaid invoices across time zones and unfamiliar markets can add even more pressure.
This is where export factoring becomes a valuable safeguard.
Many invoice financing companies, such as Factorglobe, offer non-recourse arrangements. This means that if the overseas buyer defaults or fails to pay, the factoring company absorbs the loss, rather than the exporter.
Such an arrangement helps mitigate this risk in exporting, making it easier for businesses to expand their operations without being held back by payment uncertainty.
Offering flexible credit terms, like 30, 60, or even 90 days, can make it easier to close international deals.
But for many exporters, particularly SMEs, waiting that long for payment can stretch cash reserves thin and slow down business operations.
With export factoring, that delay no longer has to hold things up.
Even if the buyer pays later, the exporter doesn’t have to wait. After the goods are delivered, the invoice can be sold to a factoring company, allowing the business to receive most of the payment upfront.
Since the factoring company handles repayment directly with the buyer, exporters won’t have to worry much about when the invoice is settled, as they’ve already accessed the funds they need to keep operations running smoothly.
Managing international invoices and following up on payments can take up valuable time, especially for small teams already busy with running day-to-day operations.
Export factoring lifts that burden by taking over tasks like invoice checks, credit assessments, and payment collection. Instead of being tied up in admin work, exporters can concentrate on keeping the business moving, whether that’s fulfilling orders, managing logistics, or building relationships with customers.
With less time spent chasing payments, businesses can focus fully on growing their global trade operations.
Here’s a quick overview of how export factoring works to give you a better understanding before you get started:
Export factoring has become more than just a financing option. It’s a reliable way for businesses to stay competitive and agile in global B2B trade.
At Factorglobe, we specialize in factoring international invoices tailored to the needs of SMEs. Our non-recourse export factoring services ensure your business is protected in the event of buyer non-payment so that you can trade internationally with greater confidence.
Plus, you can access funding in as fast as 24 to 48 hours. No long waits, just the capital you need to move forward.
Take your business further with our global factoring solution. Built to support your next cross-border opportunity.
