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A factoring transaction involves a supplier of goods (the factoring client), a buyer of those goods (typically a retailer) and a factoring company. This diagram explains the relationship between the three parties.
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Frank Zarabi, President & CEO, FAM Brands
The Basics of Factoring
1Retailer places an order with supplier.
11
RETAILER
SUPPLIER
1Factor evaluates credit worthiness of retailers.
Factor approves the order.
12
RETAILER
SUPPLIER
1Supplier ships products to retailer.
13
RETAILER
SUPPLIER
1Supplier invoices retailer and assigns invoice to Factor.
14
RETAILER
SUPPLIER
1Factor collects from retailer.
Factor pays supplier.
15
RETAILER
SUPPLIER
$ $
For more information about factoring, visit CITFactoringUniversity.com or call 800-248-3240.
SM