You've reached the end of the results

No results found

How does factoring work?

Your company, as a Seller (Adhering Party) enters into a commercial contract/order with a Buyer (Debtor) and on the basis of this contract/order delivers goods or provides services and issues an invoice.

Based on the Factoring contract, concluded between your company (the Buyer) and the Factor (the Bank), you submit the invoice and delivery documents to the Factor.

The factor pays you a percentage of the invoice amount before the due date, usually 80%, according to the terms of the factoring contract. 

When due, the Factor shall carry out amicable collection procedures of the invoice from the Debtor and the Debtor shall make payment to the Factor. After collection from the Debtor, the Factor transfers to you the difference of 20% net of any debts you owe to the Factor under the Factoring Agreement.

Latest update
  • Was your answer helpful?
  • How can we improve the answer?

    Sorry this answer was not helpful to you. Help us improve it

    0/500