Every type of factoring consists of 1 mainstream in combination with 1 or more basic elements. Different combinations make different types of factoring. There are two mainstreams:

There are 4 basic elements. You need to take into account each one of them when you are applying for a quote with a factoring company.

The factor may or may not …

• … register and manage accounts receivable
• … (partially) purchase or finance the invoices
• … monitor and collect the overdue invoices
• … take over debtor credit risk

We purchase invoices, so American factoring. Regarding the basic elements, we register, manage, (partially) purchase, monitor, collect, and take over debtor risk. So technically we apply all four basic elements, although there are options to deviate from them if our client wishes to do so. This is called non-recourse American factoring. Non-recourse means there is no payback obligation. There are, of course, some rules each party has to oblige by.

We usually purchase 100% of your invoice including VAT and pay out that amount minus our factor fee straight into your bank account. In some cases, if the client wishes so, we can purchase a part of your invoice. The remainder will then be paid when the debtor settles the invoice. We call this direct and indirect payment. Either way, the whole invoice is assigned, and you only pay for the purchase of the direct payment amount.

For the following example, imagine a factor fee of 3% *. That will give us the following two calculation examples:

*our fee varies between 1 and 5% depending on several variables