In maturity factoring, the factoring agency does not provide any advance to the firm. Advance and Maturity Factoring: In advance factoring, the factor gives an advance to the client, against the uncollected receivables.This is also termed as the two-factor system. exporter (client), the importer (customer), export factor and import factor. customer, client, and factor, reside in the same country, then this is called as domestic factoring.Įxport factoring, or otherwise known as cross-border factoring is one in which there are four parties involved, i.e. Domestic and Export Factoring: When the three parties to factoring, i.e. However, the control is in the hands of the factor. In such a case, the factor maintains sales ledger of the client and the debt is realized in the name of the firm. Disclosed and Undisclosed Factoring: The factoring in which the factor’s name is indicated in the invoice by the supplier of the goods or services asking the purchaser to pay the factor, is called disclosed factoring.Ĭonversely, the form of factoring in which the name of the factor is not mentioned in the invoice issued by the manufacturer.On the other hand, in non-recourse factoring, the factor cannot recourse to the firm, in case the debt turn out to be irrecoverable. So, the credit risk associated with the trade debts are not assumed by the factor. Recourse and Non-recourse Factoring: In this type of arrangement, the financial institution, can resort to the firm, when the debts are not recoverable.
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