Invoice Factoring Glossary
Bank Overdraft - An alternative to factoring without
the credit management services.
Credit Insurance - Insurance in case your customer
fails to pay the invoice. You receive payments for your
bad debts up to pre determined limits.
Factoring - Instant cash upon issuing invoices and
sales ledger and collection services.
Invoice Discounting - Instant cash upon issuing
invoices without sales ledger and collection services.
Invoice Finance - Another phrase for factoring and
invoice discounting.
Non-recourse Factoring - If your customer fails
to pay the invoice, the factor will pay you. You pay an
additional charge to cover the credit insurance costs.
Recourse Factoring - If your customer fails to
pay the invoice, the factor will look to you for reimbursement
of any amounts advanced against the invoice. The service
excludes bad debt protection.
