factor

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Factor

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

Factor

A third party that buys a firm's accounts receivable. If a firm is not confident in its ability to collect on its credit sales, it may sell the right to receive payment to the factor at a discount. The factor then assumes the credit risk associated with the accounts receivable. This provides the firm immediate access to working capital, which is important, especially if the firm has a cash flow problem. The price of factoring is determined by the creditworthiness of the firm's customer, not of the firm itself. It is also known as accounts receivable financing.

factor

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

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.

factor

  1. a firm that purchases TRADE DEBTS from client firms. See FACTORING.
  2. a firm that buys in bulk and performs a WHOLESALING function.
  3. an input (for example raw material, labour, capital) which is used to produce a good or provide a service.

factor

  1. 1a FACTOR INPUT that is used in production (see NATURAL RESOURCES, LABOUR, CAPITAL).
  2. a business that buys in bulk and performs a WHOLESALING function.
  3. a business that buys trade debts from client firms (at some agreed price below the nominal value of the debts) and then arranges to recover them for itself. See FACTOR MARKET, FACTORING.
References in periodicals archive ?
IFP Plan Advisors was rebranded earlier this year under the leadership of Kimberly Shaw Elliott, president of IFP Plan Advisors and in-house ERISA counsel.
75 cm on the horizontal axis, located in IFP (Figure 2).
The IFP is taking poker in a new and interesting direction and we are excited to be part of it.
IFP leader Mangosuthu Buthelezi has invited the Dalai Lama to visit him in 2012.
The whole Produce World IFP team should be congratulated for its hard work throughout the year in maintaining a high standard that has been rewarded with this A (*) status
The IFP Group has revealed that exhibition space for the coming event has already been sold out, with the UAE taking the biggest section.
uk/ Graeme Urwin, a financial planner and wealth manager at Newcastle-based financial adviser Rutherford Wilkinson, and a member of the IFP, describes here how he has helped Durham dentist Martin Burgess with his finances using the principals of the IFP.
Apex-Brasil also revealed that it facilitated, with support of IFP Emirates, some 720 business meetings during the event between a group of 40 leading Brazilian companies and various food traders from across the Pan Arab region who are exploring new investment opportunities in key growth areas of the region.
Barry Horner, who takes over as IFP president for the next two years, said: "Marlene has a passion for financial planning which is evident to all.
Integrated (fruit) production, IFP is defined by the International Organization for Biological Control as a "farming system that produces high quality food and other products by using natural resources and regulating mechanisms to replace polluting inputs and to secure sustainable farming.
IFP health spokesperson Ruth Rabinowitz is urging a drastic review of the principles underlying the law: 'The Medical Schemes Bill was intended to stop the rising cost of health care, prevent people running out of medical aid funds being dumped on public hospitals, give cover for all people regardless of health risk, provide affordable benefit for dependents and increase the number in medical schemes.