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Factor

1. A financial intermediary that purchases receivables from companies.

2. In terms of mortgages, the ratio of principal outstanding to the original balance.

Notes:

1. The sale of accounts receivables is called factoring.

See also: Accounts Receivable, Mortgage, Principal

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Factor

A financial institution that buys a firm's accounts receivable and collects the accounts.

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factor

A firm that purchases accounts receivable from another firm at a discount. The purchasing firm then attempts to collect the receivables.

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factor

To sell accounts receivable to another party at a discount from face value. Thus, a firm in need of cash to pay down short-term debt may decide to factor its accounts receivable to another firm.