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I want to understand the concept of debt factoring , is it like a sort of a loan in substance for the company selling of their debt ?
Yes, sort of. Secured (normally) by the entity’s receivable amount. The Receivable person pays the debt direct to the factor and that pays off the loan from the factor to the entity.
But (normally) if the factor cannot collect within, say, 3 months, the debt comes back from the factor and the entity has to repay the factor the full amount
Is that any better?
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