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 ?
The aim of this note is to extract the principal characteristics, stylized facts, of the YF that may help amend the LMF model.
LMF receives/deliver messages from/to Gateway/Regular nodes.
This was clearly expressed by MC Yan, the principal rapper of LMF, who in an interview with the South China Morning Post, claimed that "through hip-hop we are trying to find out who we are, what we are.
The rehearsal room is a joint initiative between LMF, the Welsh Music Foundation, and music industry bodies.
Clockwise from 12, Gerber's LMF II "Infantry" was designed and built for the field soldier, with a hammer butt, sheath-integrated sharpening system and more.
Bera169830) at the marl and LMF contact records the beginning of the Greatlakean substage.
It succumbed to the LMF conditionalities by agreeing to wide-ranging reforms and stabilisation measures to receive a US$ 57 Billion "rescue" package.
The present value of debt, adopted by the LMF, the World Bank and UNCTAD, is determined as the total of future debt service including principal debt and accrued interest adjusted for the concessionality element of the debt stock.
Finally, the recent Meltzer report on the future role of the IMF strongly e ncourages pre-certification before countries could borrow from the LMF.
Indeed, in Harare, the acronym LMF has assumed an entirely new meaning in popular discourse: 'It's Mugabe's Fault'.
Now the LMF stepped in, imposing as a condition of continued financing increasingly severe austerity measures, including wage reductions, mass lay-offs, enterprise liquidations, privatizations and financial deregulation.
They could never be accused of the old Army charge of LMF - "lack of moral fibre".