A factor refers to an institution that provides factoring services. Common factors are divided into banks and non-banks Factors provide at least the following two services:
1, trade financing. According to the seller's capital demand, the factor can provide financing to the seller immediately after receiving the transferred accounts receivable to help the seller solve the problem of liquidity shortage.
2. Sales ledger management. According to the requirements of the seller, the factor can regularly provide the seller with the collection of accounts receivable, overdue accounts, aging analysis, etc. , and send various reports to assist sellers in sales management.
3. Recovery of accounts receivable. The factor has professionals engaged in collection work, and they will take reasonable, powerful and economical measures according to the overdue time of accounts receivable to assist the seller to collect accounts safely.
4. Credit risk control and bad debt guarantee. The factor can verify the credit line for the buyer according to the seller's demand, and provide 100% bad debt guarantee for the accounts receivable generated by the seller's delivery within the credit line.