Tag: Factoring
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Contra Account
Definition of Contra AccountThis is the meaning of Contra Account published by Marco Terry: This occurs when two companies are customers and suppliers of each other. Financing these types of accounts are difficult.
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Current Account
Definition of Current AccountThis is the meaning of Current Account published by Marco Terry: The total amount of funds paid to you including any charges at any given time.
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Credit Limits
Definition of Credit LimitsThis is the meaning of Credit Limits published by Marco Terry: The financial limit that the factor places on each of your customers. This is often based on their credit rating and possible concentration issues.
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Rebate
Definition of RebateThis is the meaning of Rebate published by Marco Terry: The funds that are wired to your account once your customer pays the invoice in full. These are funds that were not initially advanced. The rebate is often calculated by subtracting the factoring fees and the advance […]
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Non Recourse Factoring
Definition of Non Recourse FactoringThis is the meaning of Non Recourse Factoring published by Marco Terry: A form of factoring where the factoring company will absorb any credit losses that result from a customer defaulting on an invoice. The types of credit losses that are absorbed vary by […]
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UCC Lien
Definition of UCC LienThis is the meaning of UCC Lien published by Marco Terry: It is a security interest given by the owner of property to secure debt. Factoring companies use liens that are defined in the UCC.
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Lockbox
Definition of LockboxThis is the meaning of Lockbox published by Marco Terry: A bank treasury management system. It is desgined to receieve payments by mail and deposit them to an account as quickly as possible. Most bank lockbox systems also scan invoices and documents and provide online […]
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Factoring Fee
Definition of Factoring FeeThis is the meaning of Factoring Fee published by Marco Terry: The fee that the factoring company charges to finance your invoices. The fee is often a discount on the gross value of the invoice and is expressed as a percentage that increases over time (e.g. 1.5% per […]
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Invoice Factoring
Definition of Invoice FactoringAnother term for factoring. See factoring.
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Factoring
Definition of FactoringThis is the meaning of Factoring published by Marco Terry: A form of business funding where a company finances their accounts receivable by selling their invoices to an intermediary called a factoring company.
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Recourse Factoring
Definition of Recourse FactoringThis is the meaning of Recourse Factoring published by Marco Terry: A form of factoring where the factoring company will not absorb any credit losses that result from a customer defaulting on an invoice. See non recourse factoring.
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Invoice Discounting
Definition of Invoice DiscountingAnother term for factoring. See factoring.
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Notice of Assignment
Definition of Notice of AssignmentThis is the meaning of Notice of Assignment published by Marco Terry: A notice that is sent to customers informing them that the invoice has been factored and pledged as collateral. The NOA also informs the customer of the new payment address.
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Medical Factoring
Definition of Medical FactoringThis is the meaning of Medical Factoring published by Marco Terry: A specialized form of factoring that is designed to work with medical companies that bill third party private insurance companies, Medicare or Medicaid.
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Collections
Definition of CollectionsThis is the meaning of Collections published by Marco Terry: Payments that the factor receives for invoices that were factored or by invoices that flow through their lock-box system.