Factoring. Financing modality by means of which an entity transfers to a third party, generally a financial institution, the future collection rights of the credits and the existing invoices in its favor and immediately obtains the corresponding cash, although although at a discount.
Arguments
Factoring can be agreed with recourse, which means that the risk of non-payment remains with the firm that transfers the credit, or without recourse, in which case the entity in which the credit is transferred assumes the risk of default. In the latter case, factoring is not only a means of financing but also a way to transfer risk.
