Factoring is a technique that involves a transfer of trade receivables from the holder (seller or participant) to a financial institution (the factor). The factor is responsible for ensuring the management and recovery, and guarantees the right in case of temporary or permanent failure of the debtor and finances all or a part of the amount of receivables transferred.
[...] Understanding the concept of factoring What is factoring? Factoring is a technique that involves a transfer of trade receivables from the holder (seller or participant) to a financial institution (the factor). The factor is responsible for ensuring the management and recovery, and guarantees the right in case of temporary or permanent failure of the debtor and finances all or a part of the amount of receivables transferred. At this point we must make a clarification to correct a common misconception, which tries to place factoring on similar lines to a technique for recovering unpaid debts. [...]
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