Many importers and exporters require a specialist form of finance which offers them the ability to finance raw goods for processing before they then sell on the finished goods.

Often confused with Guarantees, a warranty defines the proper performance of one party to the agreement and confirms their intention to be bound by it.

If the agreement is terminated and the factor is unable to recover advances made to a client, this is referred to as a shortfall.

Sales ledger management is the process of managing the issue and payment of invoices relating to work performed or goods delivered. Such things as credit policy may also be classed as part of sales ledger management. Larger companies may have several employees and whole departments which manage the sales ledger however smaller businesses may choose [..]

A sum held back from availability, in respect of contingencies. — This can include Concentration limit retentions, or debtor balances, which exceed approved funding limits.

A charge levied by the factor, against old uncollected invoices, to facilitate additional collection procedures

Many companies, after having delivered goods or an agreed service, do not ask for cash on delivery but instead issue an invoice.

It is custom and practice, for a factor to take references, from the outgoing factor, where there is an inter-factor handover.

The period after which a factoring company requires its client to buy back uncollected invoices.

The amount (set as a percentage) that the factor will advance its clients, against outstanding invoices