Finance

Tag: Factoring

  • Client

    Definition of ClientThis is the meaning of Client published by Marco Terry: A factoring client who sells their invoices to the factor. Not to be confused with the term customer.

  • Customer

    Definition of CustomerThis is the meaning of Customer published by Marco Terry: A company that purchases products or services from the factoring client and who will pay the invoice that is factored by the client.

  • Accounts Receivable

    Definition of Accounts ReceivableThis is the meaning of Accounts Receivable published by Marco Terry: Money that is owed to you by your customers, usually by issuing an invoice that is due to be paid within a certain period of time. A/R appears in the balance sheet as an asset since it’s […]

  • Dispute

    Definition of DisputeThis is the meaning of Dispute published by Marco Terry: A situation where a customer does not pay an invoice due to a problem with the product or service.

  • Concentration

    Definition of ConcentrationThis is the meaning of Concentration published by Marco Terry: The level for which a factor will fund a single customer in your portfolio. This is usually expressed as a percentage. Done as a risk management measure to ensure that a single account does not represent a […]

  • Bad Debt

    Definition of Bad DebtThis is the meaning of Bad Debt published by Marco Terry: Bad debt is debt that has a minimal or limited chance of being collected. Bad debt is often written off or sold to a collections agency.

  • UCC

    Definition of UCCThis is the meaning of UCC published by Marco Terry: Stands for Uniform Commercial Code. It is a uniform act that harmonizes the law of sales and commercial transactions in the 50 states.

  • Schedule of Accounts

    Definition of Schedule of AccountsThis is the meaning of Schedule of Accounts published by Marco Terry: It’s a form that many client’s use to submit their invoices for funding to the factoring company.

  • Purchase Order Financing

    Definition of Purchase Order FinancingThis is the meaning of Purchase Order Financing published by Marco Terry: A type of funding that finaces the supplier costs associated with a purchase order. This type of funding can only be used when the PO is for purchasing finished goods. PO financing […]

  • Advance Rate

    Definition of Advance rateThis is the meaning of Advance rate published by Marco Terry: he percentage of the invoice that will be advanced. On average, most factors advance between 70% and 85% of the gross value of the invoice.

  • Asset Based Loan

    Definition of Asset Based Loan (ABL)This is the meaning of Asset Based Loan (ABL) published by Marco Terry: It is a short term loan that is secured by the company’s assets such as inventory, real estate, equipment or accounts receivable. Most are paid back when the asset that secures the loan […]

  • Debtor Financing

    Definition of Debtor FinancingThis is the meaning of Debtor Financing published by Marco Terry: It’s an umbrella term that is mostly used in Australia that can refer to factoring, invoice factoring or invoice discounting.

  • Disapproval

    Definition of DisapprovalThis is the meaning of Disapproval published by Marco Terry: An invoice that is not approved for funding.

  • Accounts Receivable Factoring

    Definition of Accounts Receivable FactoringThis is the meaning of Accounts Receivable Factoring published by Marco Terry: Another term for factoring. See factoring.

  • Reserve

    Definition of ReserveThis is the meaning of Reserve published by Marco Terry: A specified amount of funds, often expressed as a percentage of the funding line that is used to cover bad debt expenses and payment shortages.