Factoring Glossary

Factor

The party who provides different combinations of financing, receivables management & administration and risk coverage to clients.

Client

The party who signs factoring agreement with the factor and benefits from the factoring services.

Buyer/Debtor

The party who is liable for payment of the receivables from the supply of goods or rendering of services.

Domestic Factoring

Type of factoring where factoring transactions are applied to client and buyer located in the same country.

International Factoring

Transactions related to international trade are under this type of factoring. Usually, there are two factoring companies, export and import factors, involved.

Undisclosed (Non-Notified) Factoring

Factoring type where the buyer is not notified that the receivables it is liable of are included in the factoring contract signed between the seller and the factor.

Disclosed (Notified) Factoring

Type of factoring where the buyer knows that its supplier (the seller) is a client of the factor and payments on due dates of receivables are made to factor’s bank accounts.