Trade Finance check0 / 1 answered · 0 correct
Check 1
Which technique often covers a recurring portfolio of short-term invoices?
Factoring
Understand receivables purchase and how it differs from forfaiting.
Simple meaning
Factoring generally involves the purchase and management of trade receivables, often a portfolio of short-term invoices. Services may include collection, debtor administration and credit protection.
Recourse variations
Factoring can be with or without recourse depending on the arrangement.
Compared with forfaiting
Forfaiting more often concerns specific future payment obligations and is commonly without recourse; factoring frequently covers recurring invoice portfolios and can include ongoing servicing.
Assignment and notice
Receivables law, assignment restrictions, debtor notification and perfection requirements vary by jurisdiction.
Remember thisFactoring and forfaiting both finance receivables, but their structures and typical use cases differ.
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