Factoring

The discounting of an account receivable in order to receive immediate payment. In international trade factoring is the discounting of a foreign account receivable that does not involve a draft. The exporter transfers title to its foreign accounts receivable to a factoring house (an organization that specializes in the financing of accounts receivable) for cash at a discount from the face value. Factoring is often done without recourse to the exporter. Factoring of foreign accounts receivable is less common than with domestic receivables.

Was this article helpful?

Related Articles



Need Support?

Can't find the answer you're looking for?
Contact Support