Factors Advance
The money the factor sends to the client up front, after the check process is complete, and before the factor receives its money from the client's customer. The advance is considered to be as a percentage of the face value of the factored invoices.
Factors Charge-Back
A sum of money that is owed to the factor and is deducted or Charged-Back from the reserve or availability of the line due to an agreed upon non-payment by debtor clause in the Factors contract.
Factors Client
The business which sells its accounts receivable to the factor.
Factors Fee
The fee the Factor Charges for funding the clients A/R.
Factors Reserve
A deposit maintained by the factor, to protect against disputes between the client and the customer, and to protect against bad debt losses due to customer non-payment. This is the money retained by the factor when the advance is sent to the client. The Reserve is sent to the client after the customer has paid the factor the money due on the invoice.
Factors Reserve Release
The sum of money released from the Factors Reserve once payment has been received and credited. The Reserve Release may be less any charge-back or fees associated with the services.
Factors Services
Credit Analysis, Credit Guarantees and Collection Management.
Factors Verification
This is the process by which the factor checks that the product or service provided by the client was received and accepted by the customer, and that the customer plans to pay the factor the money due under the invoice. This process is taken place before the factor sends the advance to the client.
Recourse
The main point in this type of factoring is that the risk of customer non-payment remains with the client. The factor has recourse against the client for that money in case the client's customer is financially unable to pay the money due under the invoice. The factor is protected against customer non-payment.
Working Capital
A kind of loans for business costs such as, advertising, wages, rents, and other operational costs. Often these loans are secured by palpable assets. But in the case of long-standing good credit they are secured by the "full faith and credit" of the company.
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