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 ?
While there are many reasons that going underground with electric cable for power transmission systems has historically been impractical, those inhibiting factors are not nearly as prevalent today.
Damian Walker of Totesport said: "We won't be pricing up the Shergar Cup events until the day of racing itself, and the reserve system will be one of the inhibiting factors.
Business process management (BPM); small to medium-enterprises (SMEs); strategic planning; inhibiting factors of adoption and implementation; wine industry; Australia.
Trade and Development Agency (USTDA), on Turkey's primary and secondary mortgage market, found that one of the inhibiting factors for a secondary mortgage market was "the financial services industry in Turkey has poor access to capital due to the crowding out by public-sector borrowings [Treasury bills].
The sets of encouraging and inhibiting factors were similar--that is, the presence or absence of particular factors appears to make a difference.
The Family Planning Association said: "Shame and embarrassment are inhibiting factors to people going to clinics.
NPWT controls wound fluid, thereby removing inhibiting factors, decreasing inflammatory-phase cytokines and increasing fibroblast cytokines.
Initially, a brief account documenting state tortures with respect to major facilitating factors, as well as major inhibiting factors is offered.
The author argues that the more vital inhibiting factors leading to the disadvantaged position of women are their ignorance, powerlessness and vulnerability.