BNET Business Dictionary
Business Definition for: Factoring
- the practice of transferring title to foreign accounts receivable to a third-party factoring house that assumes responsibility for collections, administrative services, and any other services requested. Major exporters use factoring as a way of reducing exchange rate risk. The fee for this service is a percentage of the value of the receivables, anywhere from 5% to 10% or higher, depending on the currencies involved. Companies often include this percentage in selling prices to recoup the cost.
- the sale of debts to a third party (the factor) at a discount, in return for prompt cash. A factoring service may be with recourse, in which case the supplier takes the risk of the debt not being paid, or without recourse, when the factor takes the risk.
- See also Invoice Discounting
Additional Resources
- Raise Cash Through "Factoring"
- Sell unpaid accounts receivable to a factoring company that will trade them for immediate cash. The scenario: Customers are slow to pay, and unpredictable cash flow is disrupting operations. The tactic:...
- Articles 2008-11-21
- Factoring Your Way to Liquidity
- There are various types of factoring available. These factoring can be in any industry viz. account receivable factoring, asset based lending, business loans, construction factoring, credit card receivables factoring, distributors factoring, equipment, hard money loans, invoice factoring, manufacturing, medical factoring, purchase order financing, real estate lending, staffing, systems, technology, trucking,...
- White papers
- Cash-hungry CEOs Can Turn to Factoring
- Cash hungry CEOs who find their credit lines severely tightened do have a way out -- factoring. Factoring involves companies that buy bills for money owed to a particular company. The factoring firms provide cash up front minus their charges which typically can be 5 to 6...
- Blog posts 2008-10-27
- Global Growth in Factoring?and its Potential in Eastern Europe Financing Small and Medium-Size Enterprises With Factoring
- This paper explores the advantages of factoring over other types of lending for firms in developing economies, and discusses the informational, legal, tax and regulatory barriers to its growth. Factoring is a form of asset-based finance where the credit extended is based on the value of the borrower's accounts receivable....
- White papers 2004-05-01
- Factoring: An Effective Way to Downsize and Outsource in the '90s
- Factoring company offer's accounts receivable financing, invoice factoring, invoice discounting, working capital financing. The services that the factor performs for the client -credit approval, accounts receivable, bookkeeping, collection - are essential to the client's operation, but they are not the basic areas from which the client creates profit. Factoring provides...
- White papers 2003-01-01
- Factoring: Converting Accounts Receivables Into Capital
- It has been observed that keeping the cash flowing is a challenge for all businesses. As every business owner knows, sales alone do not measure the profitability of a company. The solutions may be Accounts Receivable Funding provided through Diversified Funding Services, Inc. Accounts Receivable Factoring is quickly becoming a...
- White papers 2003-10-01
- The Evolution of Factoring
- From its humble beginnings as the mainstay of rag trade and lender of last resort, factoring has reinvented itself to remain an important financing alternative for manufacturers and service providers alike. In this article, Howard Brod Brownstein speaks with several industry professionals and traces the evolution of factoring. The old-fashioned...
- White papers 2003-04-01
- Factoring Can Be an Ideal Solution for Start-Up and/or Growing Businesses and Me
- Factoring is one of the oldest methods of business financing in existence. The history of factoring dates back to the days of moneylenders in the middle ages. Factoring has been the working capital facility of choice in Europe for centuries. It has taken on a new life in recent years...
- White papers
- CIT GROUP GROWS BY ACQUIRING GE UNIT'S U.S. FACTORING ASSETS.(Brief Article)
- NEW YORK-In a move that strengthens its dominance in the retail factoring business, the CIT Group said last week that its commercial services division acquired a portion of the U.S. factoring assets of GE Commercial Services, worth $446 million. Term NEW YORK-In a move that strengthens...
- Research articles 2003-09-22
- CIT Group acquires major Europe factoring operation (Furniture Today)
- New York-- CIT Group, a financial services company with a sizable factoring operation, has acquired the German operations of Enterprise Finance Europe, a major player in the European factoring market. New York-- CIT Group, a financial services company with a sizable factoring operation, has acquired...
- Research articles 2006-05-29
- Merger costs CIT $10.6m. (factoring company CIT Group Holdings Inc.)
- MERGER COSTS CIT $10.6M NEW YORK FNS - The CIT Group Holdings, Inc., took a $10.6 million writeoff ($6 million after-tax) for the cost of combining Meinhard-Commercial Corp. and Manufacturers Hanover Commercial into a single factoring firm, The CIT Factoring Group. ...
- Research articles 1990-01-23
- Niche factoring still growing, but competition is stiffening. (re-factoring)
- Re-factors provide credit guarantees, cash advances, collections and other factoring services to smaller apparel firms, including those with sales as low as $300,000. Westgate Financial Corp Pres Bruce L. Cohen said that his clients, when they reach about $7 million in sales, graduate to NationsBanc, a larger factoring firm. Westgate,...
- Research articles 1995-02-08
- Accounts Receivable Funding (Factoring) Explained
- Article defines factoring process which is one part of working capital. In other terms, Accounts Receivable Funding also known as factoring is the sale of invoices at a discount. A method of financing that is used by businesses to raise capital quickly and improve cash flow without going into debt....
- White papers 2003-01-01
- Factoring: Cash Flow Solution For the New Millennium
- Cash flow, the "energy" moving in and out of your business, is the most critical item on any business priority list. Without cash, the business can't pay its bills, expand, or even remain in operation. And giving your customers interest free loans is not helping. Factoring is the most powerful...
- White papers 2003-01-01
- Factoring...A Sensible Solution In Today's Tight Credit Environment
- Cash flow is a business's biggest need, and when it fails to flow, there is a simple and time proven method to liquidate receivables into ready cash. Factoring is a cash flow tool that can be used by a variety of businesses because of the ancillary services it provides and...
- White papers 2002-01-01
- Confirm CIT to acquire Barclay's; largest factoring merger in history. (CIT Group Holdings to acquire Barclays Commercial Corp.) (Brief Article)
- Largest factoring merger in history NEW YORK - In the largest factoring combination ever, CIT Group Holdings, parent of the CIT Group/Commercial Services, has agreed to acquire Barclays Commercial Corp. The agreement confirms reports in DNR (Oct. 29, Page 10)...
- Research articles 1993-11-09
- Guberman exits CIT Factoring, joins law firm. (Harvey C. Guberman)
- Guberman Exits CIT Factoring, Joins Law Firm NEW YORK FNS -- Harvey C. Guberman has resigned from CIT Group Factoring to join the Kreindler & Relkin law firm as a partner. Guberman, a vice-president and general counsel at CIT, has been ...
- Research articles 1988-11-01
- Factoring panel set for CFA convention.(Commercial Finance Association)(Brief Article)
- NEW YORK -- The expanding frontiers of factoring will highlight the agenda of the 53rd annual convention of the Commercial Finance Association to be held Nov. 5-7 at the Philadelphia Marriott. The factoring session, scheduled for a Nov. 7 breakfast, will be moderated by Robert S....
- Research articles 1997-10-01
- CIT Group intensifies efforts for overseas business. (CIT Group-Factoring, commercial finance)
- CIT Group Intensifies Efforts for Overseas Business NEW YORK FNS -- CIT Group/Factoring, already a major player in international factoring, plans to step up efforts to increase its share of that growing market. "We are going after the serious manufacturer,...
- Research articles 1989-04-19
- CIT LOGS RECORD Q3 FACTORING VOLUME; THE TRADE FINANCE UNIT HAD $117.1 MILLION IN NET REVENUES.(Brief article)
- Byline: Michael Rudnick NEW YORK-CIT Group Inc. saw record factoring volume for the recent quarter. CIT's Trade Finance, its factoring division, reported factoring volume of $11.8 billion for the third quarter ended Sept. 30, said Jeffrey Peek, chairman and chief executive...
- Research articles 2006-10-23
Neighboring Terms
Premier Vendor Content Whitepapers, webcasts & resources from our Power Center Sponsors
