Trade Debts

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August 31, 2024 4 min read Definitions

Factoring: Definition, Types, and Importance in Finance

Finance Banking Factoring Trade Debts Working Capital Finance Credit Risk

Factoring is a financial transaction involving the sale of a company's accounts receivable to a third party, known as a factor, to improve cash flow and manage credit risk. This article delves into its types, historical context, importance, key events, and applicability in modern finance.