Study On The Factoring Financing

Factoring financing plays an important role in the field of modern commercial finance,which has become one of the most important means of financing to many small and medium-sized enterprises.As the new financing system based on traditional assignment of creditor’s rights,factoring financing is not only widely used in the field of international trade,but also has been developed rapidly in the field of domestic financing.In addition to many commercial banks which are carrying out factoring in China,a large number of commercial factoring companies have also been established.However,compared with the development of factoring practice,the development of factoring financing legislation in China is very backward,and this situation has affected the judicial settlement of the cases of factoring contracts.From the assignment of creditor’s rights system,the legal basis of factoring financing,this paper analyses changes and challenges of factoring financing to the traditional theory,and in order to promote the development of factoring and to improve China’s current major defects of factoring financing,this article puts forward reasonable proposals by comparison with foreign legislation.Besides the preface and postscript,the paper is consist of five parts.The first part mainly introduces the basic theories of factoring and factoring financing.The basic theories mainly includes the concept of factoring financing,classification of factoring,and institutional functions,etc.,and by the analysis of the concept of factoring financing and comparison with the related creditor’s rights financing system,the advantages of factoring financing can be reached.Factoring financing is the most important function of the factoring,which makes full use of the circulation and benefit of the creditor’s rights to alleviate the shortage of liquidity of enterprises.The second part analyzes the institutional basis of factoring financing from the perspective of Jurisprudence.Because the core of factoring financing business is the assignment of creditor’s rights,and which is based on the traditional assignment of creditor’s rights.The essence of factoring financing is still the assignment of creditor’s rights.However,because of its commercial characteristics,whether from the scope of the object of creditor’s rights,or the effect of the creditor’s rights,factoring financing is different from the traditional theories of assignment of creditor’s rights.Factoring financing reinterpret the legal relationship of the assignee,the assignor and the debtor from various aspects.In the third part,the paper analyses the defects and deficiencies in China’s current factoring financing from the perspective of process of factoring financing practice.Accounts receivable(debt)came from the transaction of goods or service,can be assigned to factor,so as to obtain financing.Then the buyer pays to the factor directly.So the whole process of factoring financing can be seen as the assignment of creditor’s rights.However,compared with international factoring,there still are many defects in China’s domestic factoring.For example,the future advances and advances that can not be transferred to third party by special article can not be the objects of factoring,and conflicts by the multiple assignment cannot be solved because of the lack of legal means,and the legal provisions of traditional assignment is not enough to protect the parties of the factoring financing contracts.The fourth part uses the comparative method to study the legal system of other countries.Through the comparative analysis to the financing system of assignment of creditor’s rights of other countries in the world,the future advances and advances that can not be transferred to third party by special article become transferable,and the establishment of publicity system are effective solutions to problems mentioned in the third parts.The fifth part puts forward the author’s own suggestions on the problems of China’s factoring financing.The future advances and advances that can not be transferred to third party by special article can be the objects of factoring contract from the perspective of Jurisprudence;the establishment of a unified registration system of financial assignment of creditor’s rights can not only effectively solve conflicts of multiple claims,but also link up with other creditor’s rights system;to establish an effective system to protect the reliance interest,and to reasonably distribute liability to the two parties according to their faults;to establish a unified management system of factoring industry,so that China’s factoring financing business can be more orderly developing.