NATURE OF FACTORING

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OPTION DISCOUNT AT MATURITY DISCOUNT TO COLLECTION • Discount rate charged against invoice amount from day Prepayment made until maturity date of invoice • This method prevalent in US • Advantage to Seller: Charge is fixed; no more charge if customer pays late • Disadvantage: No benefit to Seller if customer pays early • Discount rate accrues day-to-day (like an interest rate) on invoice amount from day Prepayment made until date of collection • This method prevalent in UK • Disadvantage to Seller: charge continues to accrue if customer pays late • Advantage to Seller: Less charge is customer pays early 2009
OPTION NO DISCOUNTING DISCOUNTING • Client does not need financing • Prepayments made to finance client’s business 2009
Page 1 and 2: NATURE OF FACTORING www.factors-cha
Page 3 and 4: UNIDROIT CONVENTION ON INTERNATIONA
Page 5 and 6: UK PRACTICE: MUCH BROADER • COMBI
Page 7 and 8: UK FACTORING AGREEMENT RECOURSE OPT
Page 9: RECOURSE FACTORING v INVOICE DISCOU
Page 13 and 14: OPTION NO DISCLOSURE DISCLOSURE •
Page 15 and 16: BENEFITS TO THE TOURISM SECTOR •
Page 17 and 18: USE & MISUSE OF FACTORING USES •
Page 19 and 20: 2009
Page 21 and 22: BENEFITS OF FACTORING HAVE LED TO G
Page 23 and 24: 700,000 DOMESTIC FACTORING 600,000
Page 25 and 26: www.agricap.com • Peruvian Packag
Page 27: FARMER FINANCING IN THE CARIBBEAN

NATURE OF FACTORING

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