star funding factoring definitions d-z
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STAR FUNDING, INC.1
Purchase Order Funding
Factoring
Letters Of Credit
Your Premier Trade Finance Organization
Factoring DefinitionsD-Z
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Deduction
Some form of reduction of payment from customers against original invoices.
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Dilution
Any reduction of payment against original invoices. Could be in the form of discounts,
chargebacks, marketing rebates, and deductions
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Due Diligence
Review of a client to verify financials, history, and certificate of good standing for your corporation. Some may include audits of business processes and inventory. This determines your eligibility for an accounts
receivable factoring program.
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Factoring
Purchase of accounts receivable without recourse, assuming the risk of inability to
pay by customers.
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Finished Goods
Items that are complete and ready for re-sale.
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Guarantee
Requires commitment of the client to be personally responsible for damages and
losses in the event of default.
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Ineligible Receivables
Receivables the factor will not lend against.
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Invoice
A document sent to a customer outlining items sold, terms of payment requested, names and addresses of supplier and
customer.
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LIBOR
London Inter-Bank Offered Rate. Used as a benchmark for pricing commercial loans.
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Non-Recourse Factoring
The risk of non-payment by Account Debtors is assumed by the factor who is purchasing the receivables. The Factor
assumes the responsibility for credit approval based on debtors financial
situation and recent payment history.
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Pre-Billing
Takes place when invoices are sent to customer before goods are shipped or
services are rendered.
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Proof of Delivery
Can be in the form of email confirmation, phone confirmation, signed shipping
documents or status updates on merchant portals. Proof of delivery is required for a
factor to verify receivables.
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Recourse
Client(Account Creditor) assumes all risk associated with credit of their customers.
The factor does not guarantee the credit of customers. The factor assumes no
responsibility and invoices can be charged back at any time.
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Reserve
The balance of invoice amount not advanced to customer. This amount is held by the factoring company and paid to the client upon receipt of payment from end
customer.
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Spot Factoring
The ability to factor selective invoices with little to no commitment beyond single
invoices.
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Terms of Sale
Time frame and method of payment offered to customers.
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Wholesaler
Distributor of goods to resellers.
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Work In Process
Where work still needs to be completed or materials processed in order to create a
finished product.
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Working Capital
Capital or money that is available to cover the daily operating costs of your business. Working capital is often set aside to cover expenses like rent, payroll, utilities, and
other miscellaneous expenses.
WWW.STARFUNDING.COM21
Avi W. Levine
Vice President
(212) [email protected]
237 West 37th Street.New York, NY 10018
CONTACTS