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Factoring is a financial transaction whereby a business sells its accounts receivable to a third party at a discount in exchange for immediate money with which to finance continued business. Factoring differs from a bank loan in three main ways. First, the emphasis is on the value of the receivables, not the firm s credit worthiness. Secondly, factoring is not a loan it is the purchase of a financial asset. Finally, a bank loan involves two parties whereas factoring involves three.

Produktbeschreibung
Factoring is a financial transaction whereby a business sells its accounts receivable to a third party at a discount in exchange for immediate money with which to finance continued business. Factoring differs from a bank loan in three main ways. First, the emphasis is on the value of the receivables, not the firm s credit worthiness. Secondly, factoring is not a loan it is the purchase of a financial asset. Finally, a bank loan involves two parties whereas factoring involves three.