Types of contracts


There are usually three different types of contracts:

Full factoring
The factor takes full charge of the billing department, is responsible for collection, cashing and bookkeeping and account receivable financing. The client here is necessarily notified.

Confidential or semi-confidential
The client keeps charge of its billing but its account receivables are funded. This contract can be notified or unnotified.

Account receivable financing
Under this contract, only the sales ledger is sold and financed, not individual invoices. This contract can be notified or unnotified. This contract, though providing essentially the same services as the previous one, has a much simplified management process as funding is not provided on a per-bill basis but on a global basis.

All of these contracts can provide credit protection (without recovery), or provide a credit insurance contract protection.