1. Factoring is also called payment guarantee, also called insurance processing and claim settlement. The seller transfers its current or future accounts receivable based on the goods sales/service contract signed with the buyer to the factor (a financial institution providing factoring services), and the factor provides it with a series of comprehensive financial services such as financing, buyer's credit evaluation, sales account management, credit risk guarantee and account collection. It is a method that the seller entrusts a third party (the factor) to manage the accounts receivable in order to strengthen the management of accounts receivable and enhance the liquidity when the payment is settled by collection or credit in commercial trade.
2. Guarantee refers to the system that the law urges the debtor to perform the debt with the credit or specific property of the debtor or a third party to ensure that the specific creditor realizes the creditor's right.