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.
Non Recourse Factoring: :Factoring service where the factor gives protection against bad debts.
Recourse Factoring: :The service does not include protection against bad debt by the factor.