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LSDefine

Simple English definitions for legal terms

factoring

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A quick definition of factoring:

Factoring: Factoring is when a company sells its unpaid bills to another company for a lump sum of money. The company buying the bills is called a factor. The factor gets the money from the bills when they are paid, and the company selling the bills gets money right away to help their business.

A more thorough explanation:

Factoring is when a company sells its accounts receivable to another company, called a factor, for a lump sum of money. The factor then collects the money owed by the accounts and keeps a percentage as profit.

For example, let's say a small business has $50,000 in accounts receivable from various customers. They need cash immediately to pay for expenses, so they sell their accounts receivable to a factor for $40,000. The factor then collects the $50,000 from the customers and keeps a percentage, say 10%, as profit. The small business gets the cash they need right away, and the factor makes a profit from collecting the money owed.

Another example could be a clothing manufacturer who sells their products to a department store. The department store agrees to pay in 60 days, but the clothing manufacturer needs cash now to pay for materials and labor. They sell their accounts receivable to a factor for a lump sum of money, and the factor collects the money owed by the department store in 60 days.

Overall, factoring allows companies to get immediate cash for their accounts receivable, while the factor makes a profit from collecting the money owed.

factor's lien | failure of consideration

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MIAMI A
[] AromaticTroubledDormouse
20:55
How does one know if they are UR1 or UR2?
[] AromaticTroubledDormouse
20:56
CONGRATS MACAQUE!
TY
got a random stanford email and almost had a heart attack
ALSO CONGRATS!
Congrats1!
21:15
Miami A, yall I'm so excited I could cry.
21:15
Feel like I can finally stop holding my breath!! Whew!!!
[] baddestbunny
22:16
every time I get accosted by a strange man who follows me around because my male coworkers were too busy talking to walk me back to my car I get closer to saying we need to bring back traditional gender roles
Dkk
22:32
Nice! @Macaque
Dkk
22:32
@Aromatic, Have to guess.
Dkk
22:33
That sucks @Bunny do you have to go to the hospital?
[] baddestbunny
22:40
I said accosted not assaulted
23:35
guys. my notre dame address just went long is this good or bad
1a2b3c4d26z
23:37
Oooooo me too
23:37
omg is this good or bad
Dkk
23:47
Idk if gender roles are gunna fix that then.
23:49
it looks like most people who applied in october last cycle didn't get a decision until january... does it even mean anything that our addresses went long??
hows ED 2 compared to ED 1?
Dkk
0:10
No idea
windyMagician
0:34
reporting live to say my ndls address also went long
does it mean anything ^
Dkk
2:21
NDLS and Fordham took a very long time last year. It's good info for people to know.
[] baddestbunny
4:29
let’s get after it boys and girls
Dkk
5:21
I gtg to bed soon.
Dkk
5:22
Big day today. Gunna be a crazy one. I will sleep through the first half.
good morning lsd it is 5 am EST
also jazzy my ndls address went long ages ago i sadly do not think it means anything
my stanford address also went long LOL i think at most it's an indicator it's under review
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