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Factoring

   Also found in: Dictionary/thesaurus, Medical, Legal, Encyclopedia, Wikipedia, Hutchinson 0.01 sec.
Factoring

Factoring
The act or practice of selling a firm's accounts receivable to a third party, known as a factor. 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 allows the firm access to working capital immediately, which is important especially if the firm might otherwise have 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.


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Read this article to learn how invoice factoring financing can help enhance the cash flow of your Canadian business.
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Read this article to learn how you can improve your agency''s cash flow by using invoice factoring financing.
 
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