Factoring is the process of purchasing accounts receivable from corporations usually with no recourse to the seller if the receivables go bad.

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Factoring is a financial transaction where a company sells its accounts receivable to a third party, called a factor, at a discount. The factor then assumes responsibility for collecting the receivables from customers and bears the risk of non-payment. Recourse factoring means that the seller is responsible for repurchasing the receivables if they go bad, while non-recourse factoring means that the factor assumes the risk of non-payment and the seller is not responsible for repurchasing the receivables.

Factoring Is the Process of Purchasing Accounts Receivable from Corporations