Factoring is a financial management technique for a company to access immediate money without borrowing in the traditional way. The beneficiary will transfer its fresh invoices (to clients) to the factor and will receive the invoices’ face value (minus costs and interests). In case an invoice would eventually not be cashed from the debtor by the factor, the latter will require its money back from the beneficiary company in exchange for the original invoice.
Moreover, factoring is usually coupled with credit insurance (covering payment default).
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