• STRUCTURED PRODUCTS

    STRUCTURED PRODUCTS

    Factoring

    In a factoring arrangement, the client makes a sale, delivers the product or service and generates an invoice.

    The factor buys the right to collect on that invoice by agreeing to pay the client the invoice’s face value less a discount—for example, 2 to 6 percent.

    The factor pays 75 percent to 80 percent of the face value immediately and pays the balance (less the discount) when the client’s customer pays.

     

    We shall study about this article further, in detail, in our next post.

     

    Keep reading!!

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