1. Commercial factoring refers to a trade financing tool in which the supplier transfers the accounts receivable generated from the goods sales/service contract signed with the buyer to the factor, and the factor provides them with comprehensive financial services such as accounts receivable financing, accounts receivable management and collection, and credit risk management.
2. The essence of commercial factoring is that the supplier converts the credit of the core enterprise (that is, the buyer) into his own credit based on commercial transactions, and realizes accounts receivable financing.