The client of the factor that transfers to the latter their rights on the accounts receivable resulted in its commercial relations with the Assigned Debtor.

(Account) Receivable Assignment

The agreement under which the Adherent transfers to the Factor their rights on the present or future account receivables of the Adherent against a Debtor (Assigned Debtor) under a commercial relation.

Setoff (offsetting)

A cashless operation whereby mutual debts between the Adherent and the Debtor are extinguish by means of simple accounting operations.

Assigned Debtor

The buyer/beneficiary (importer) of the goods and/or services of the Adherent, which goods and/or services underlie the receivables assigned by the Adherent to the Factor; the Debtors have to be accepted by the Factor in terms of further performing their relation with the Adherent by factoring.


A specialized institution that, for a consideration, pays in advance or on the due date to the Adherent, the amount of the accounts receivables assigned and deemed eligible, up to the approved ceiling, and subrogating in their rights, and is to collect the accounts receivable the owner of which they have become from the Assigned Debtors.

Export Factor

The company or the resident or non-resident bank that acquires accounts receivable from the exporter.

Import Factor

The company or the resident or non-resident bank that accepts to take-over the risk of default of a Debtor (Importer).

Recourse Factoring

For this type of factoring, the default risk of the Assigned Debtor is borne by the Adherent; when the Debtor is unable to pay the amount due, the Factor has a right of recourse against the Adherent on a date set under the Factoring Agreement.

Non-Recourse Factoring

For this type of factoring, the default risk of the Assigned Debtor is transferred to the Factor; in case of default, this no longer has a right of recourse against the Adherent. In general, the Factor takes reinsurance measures against the risk of default of the Debtor, and may opt to execute an insurance policy to cover for such risk of default, or for the guarantee offered by the Import Factor according to the international GRIF rules.

Notice Letter

The document issued by the Adherent and sent to the Assigned Debtor under which the latter is given notice of the fact that all the accounts receivable stemming from their commercial relation are assigned in favour of the Factor. As of the receipt thereof, the Assigned Debtor is under the obligation to pay the amounts due under their commercial relations into the account indicated by the Factor, and such payment shall become the only valid possibility of paying off their debts.

Domestic Factoring

The sale to a third party (Factor) of accounts receivables held by a resident company against another resident company with a view to obtaining financing or other services included in the factoring package.

International Factoring

The sale of accounts receivable by an exporter to a third party (Export Factor) with a view to obtaining financing or other services included in the factoring package.

Default Risk Coverage Service

A covered account receivable is defined as being that account receivable that is certain, of a fixed amount an due that falls within the scope of coverage determined by the Factor, and that is subject to no (commercial) dispute whatsoever; the covered risks are: insolvency, bankruptcy and prolonged non-payment; the coverage rate is standard, and can be even 100%.

Invoice Management Service

The actor shall provide services that include taking-over all the invoices issued by the Adherent to Assigned Debtors, keeping records, and providing management thereof, as well as making available to the Adherent, on a monthly basis or at their request, reports on the factored accounts receivable.

Invoice Collection Service

Collection activity is outsourced for the accounts receivable assigned to the Factor, and the latter shall take actions to have such collected. Thus, the Factor pursues collection of all receivables (approved and/or not approved, covered and/or not covered) related to an Assigned Debtor, on the due date thereof. In case of late payments, the Factor shall initiate specific collection procedures. For a Recourse Factoring facility, collection of the accounts receivable assigned to the Factor may be carried out until the recourse date set out under the Factoring Agreement; at the expiry of this term, the account receivables that are not covered will be re-assigned (resold) to the Adherent, and the Factor shall not longer be required to pursue their collection.

Financing Services

The Factor shall pay to the Adherent, in advance, up to 100% of the amount of the assigned receivables (up to the approved ceiling); when the advance payment is lower than 100% of the amount of the assigned receivable, the different (reserve) shall be transferred to the Adherent on the date when the Factor makes the collection, pursuant to the provisions of the Factoring Agreement.