Factoring Terminology
Posted: Tue Jan 28, 2025 5:33 am
To better understand the processes that occur during factoring, you need to know several terms:
The main person acting as a third party between the supplier and the buyer is the factor . It can also be called a financial or commercial agent. An organization that provides funds. The legislation (Civil Code) provides for some requirements regarding the factor. The procedures for concluding an agreement on the transfer of monetary rights are not subject to licensing. However, only a legal entity can act as a financial agent. It can be an MFC, a bank, or other independent organizations. As for the situation in Russia, most factoring procedures are provided by banking organizations, as well as their branches or subsidiaries.
A factoring client is a contractor romania email list or supplier of goods and services acting as a creditor. It provides the buyer with a temporary payment deferment, shifting the task of debt repayment to the financial agent.
A factoring company must be a legal entity by law. The company is engaged in commercial activities, has finances for factoring, for which it subsequently receives a commission.
A factoring organization is a company that carries out factoring.
A factoring agreement is an official document that has legal force. It defines the rights and obligations of the seller and the buyer, and takes into account other relations of the parties when making a transaction.
Supplier, contractor - a third-party organization that provides goods or services to the lender.
The buyer is a debtor who is obligated to pay the debt for work performed or goods shipped within the specified time.
Factoring service is a step-by-step procedure, thanks to which a factoring organization (MFC, bank) ensures the execution of factoring operations - providing the client with funds in the amount of up to 90% inclusive. In this case, the seller can continue his commercial activity with other buyers without the threat of a temporary lack of funds.
Factoring operations are a set of procedures aimed at providing factoring to the seller. This includes the analysis and calculation of the debtor's solvency, its current financial condition, the process of transferring primary documents and money to all parties, etc.
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Alexander Kuleshov
Alexander Kuleshov
General Director of Sales Generator LLC
Read more posts on my personal blog:
Over the past 7 years, we have conducted over 23,000 comprehensive website audits and I have learned that all of us as leaders need clear and working algorithms for our marketing and sales.
Today we will share with you 6 of the most valuable documents that we have developed for our clients.
Download for free and implement today:
Step-by-step guide to creating marketing KPIs
Template for calculating KPIs for a marketer
9 Examples of Universal Selling Commercial Proposals
Upgrade your CPs to close more deals
How to make KPI for the sales department so that profits grow by 20% or more?
Step-by-step template for calculating KPIs for OP managers
Checklist of 12 main indicators for website promotion
Find out what metrics are needed to properly optimize your website
40 Services for Working with Blog Content
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How to define your target audience without mistakes?
A proven guide to defining a company's target audience
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Scheme of a transaction using factoring
Factoring Terminology
An agreement is drawn up under which the seller and the buyer agree to supply goods or provide services with a certain deferred payment period.
Both parties to the transaction decide to involve a third party in the scheme , which acts as a factoring organization.
The official agreement is signed by the creditor and the factoring organization. The seller provides the agreement concluded with the buyer, as well as primary documents for the supply of goods and services. The financial agent analyzes the debtor's condition to ensure its subsequent solvency. It is necessary to clarify the buyer's financial discipline in repaying debts. In addition to the above, the following information must be specified in the agreement:
The main person acting as a third party between the supplier and the buyer is the factor . It can also be called a financial or commercial agent. An organization that provides funds. The legislation (Civil Code) provides for some requirements regarding the factor. The procedures for concluding an agreement on the transfer of monetary rights are not subject to licensing. However, only a legal entity can act as a financial agent. It can be an MFC, a bank, or other independent organizations. As for the situation in Russia, most factoring procedures are provided by banking organizations, as well as their branches or subsidiaries.
A factoring client is a contractor romania email list or supplier of goods and services acting as a creditor. It provides the buyer with a temporary payment deferment, shifting the task of debt repayment to the financial agent.
A factoring company must be a legal entity by law. The company is engaged in commercial activities, has finances for factoring, for which it subsequently receives a commission.
A factoring organization is a company that carries out factoring.
A factoring agreement is an official document that has legal force. It defines the rights and obligations of the seller and the buyer, and takes into account other relations of the parties when making a transaction.
Supplier, contractor - a third-party organization that provides goods or services to the lender.
The buyer is a debtor who is obligated to pay the debt for work performed or goods shipped within the specified time.
Factoring service is a step-by-step procedure, thanks to which a factoring organization (MFC, bank) ensures the execution of factoring operations - providing the client with funds in the amount of up to 90% inclusive. In this case, the seller can continue his commercial activity with other buyers without the threat of a temporary lack of funds.
Factoring operations are a set of procedures aimed at providing factoring to the seller. This includes the analysis and calculation of the debtor's solvency, its current financial condition, the process of transferring primary documents and money to all parties, etc.
Download a free selection of tools for calculating KPIs and increasing marketing metrics
Alexander Kuleshov
Alexander Kuleshov
General Director of Sales Generator LLC
Read more posts on my personal blog:
Over the past 7 years, we have conducted over 23,000 comprehensive website audits and I have learned that all of us as leaders need clear and working algorithms for our marketing and sales.
Today we will share with you 6 of the most valuable documents that we have developed for our clients.
Download for free and implement today:
Step-by-step guide to creating marketing KPIs
Template for calculating KPIs for a marketer
9 Examples of Universal Selling Commercial Proposals
Upgrade your CPs to close more deals
How to make KPI for the sales department so that profits grow by 20% or more?
Step-by-step template for calculating KPIs for OP managers
Checklist of 12 main indicators for website promotion
Find out what metrics are needed to properly optimize your website
40 Services for Working with Blog Content
We have collected the best services for working with content
How to define your target audience without mistakes?
A proven guide to defining a company's target audience
Download the collection for free
pdf 8.3 mb
doc 3.4 mb
Already downloaded
153398
Scheme of a transaction using factoring
Factoring Terminology
An agreement is drawn up under which the seller and the buyer agree to supply goods or provide services with a certain deferred payment period.
Both parties to the transaction decide to involve a third party in the scheme , which acts as a factoring organization.
The official agreement is signed by the creditor and the factoring organization. The seller provides the agreement concluded with the buyer, as well as primary documents for the supply of goods and services. The financial agent analyzes the debtor's condition to ensure its subsequent solvency. It is necessary to clarify the buyer's financial discipline in repaying debts. In addition to the above, the following information must be specified in the agreement: