factoring

In finance, the selling of accounts receivable on a contract basis to an agency known as a factor in order to obtain cash payment before the accounts come due. The factor assumes full responsibility for credit analysis of new accounts, payments collection, and credit losses. Factoring is most often used in seasonal industries such as textiles and shoes to shift the functions of credit and collection to a specialized agency.

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Factoring can refer to the following:

• A form of commercial finance - see factoring (finance); structured settlement factoring transaction
• Factorization, a mathematical concept