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| The sale or transfer by a supplier of legal title to accounts receivable (invoices).
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| The supplier sells or transfers title to the receivables to a third party known as a factor.
| | Products that are sold quickly at relatively low cost. |
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| The arrangement can be either with or without recourse.
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| Factoring is often a convenient - but relatively expensive - form of finance for weaker corporate credits.
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| The supplier sells its invoices, at a discount, to the factor. The factor then becomes responsible for collecting the debt.
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| A factoring agreement between the factor and a client sets out the terms on which a factoring arrangement is made.
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| As noted above, factoring arrangements can be with or without recourse.
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| Recourse factoring allows the factor to recover from the supplier/borrower any losses caused by bad debts.
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| == See also == | | == See also == |
| | * [[Capital goods]] |
| | * [[Consumer goods]] |
| | * [[Service]] |
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| * [[Factors]]
| | [[Category:The_business_context]] |
| * [[Confidential factoring]]
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| * [[Debt factoring]]
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| * [[Domestic factoring]]
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| * [[Export factoring]]
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| * [[Import factoring]]
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| * [[Internal factoring]]
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| * [[International factoring]]
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| * [[Invoice discounting]]
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| * [[Recourse]]
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| * [[Securitisation]]
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Revision as of 22:56, 21 October 2019
(FMCG).
Products that are sold quickly at relatively low cost.
See also
