Account Debtor
The company owing the money due on the invoices. The customer of a factor's client. It is also known as the customer.
Accounts Receivable
Trade credits; a sum owed by an account debtor by the act of granting short term unsecured credit in place of cash for goods or services.
Accounts Receivable Financing
A short-term financing method which is used for working capital objectives.
Acquisition
This is a loan which helps in getting the assets of a business.
Asset Based
It is a kind of a business loan. The borrower pawns as concomitant for the loan any assets used in the conduct of his or her business. These loans are secured.
Credit
A kind of privilege that are given for the objectives of prolonging time for making payment on a debt.
Customer
The company which pays the money obligations under the factored invoice; the client's customer. It is also known as the account debtor.
Dilution
The quantity of risk associated with collection of the accounts receivable that can include returns, charge-backs, trade allowances, concentrations, slow pay, bad debt and other perceived risk.
Due Diligence
Background check and research attended by the factor to assess lawfulness of a future factoring client and that client's customers.
Factor
The funding source for the client; the company which buys the accounts receivable (invoices) from the client.
Factoring
The selling of a company's accounts receivable to a third party, in order to get funding.
Factors Acknowledgment Form
A form sent to the client's customer by the factor, corroborating that the client's invoice does exist and that the customer will remit the payment due under that invoice to the factor.
| 
