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Frank Zarabi, President & CEO, FAM Brands The Basics of Factoring 1 Retailer places an order with supplier. 1 1 RETAILER SUPPLIER 1 Factor evaluates credit worthiness of retailers. Factor approves the order. 1 2 RETAILER SUPPLIER 1 Supplier ships products to retailer. 1 3 RETAILER SUPPLIER 1 Supplier invoices retailer and assigns invoice to Factor. 1 4 RETAILER SUPPLIER 1 Factor collects from retailer. Factor pays supplier. 1 5 RETAILER SUPPLIER $ $ For more information about factoring, visit CITFactoringUniversity.com or call 800-248-3240. SM

The Basics of Factoring

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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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Page 1: The Basics of Factoring

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