Factoring Company

Blondie

Iv got a quick question. One of our suppliers went into administration last week but they were using a factoring company. We owed them money and they owed us. Does anyone know the legalities about having to pay the factoring company?

Blondie

slackda

Depends on the factoring arrangement,

You can "sell" your receivables to a factoring company but if they can't collect they give the debt back to you...
or you can sell you receivables @ a Discount and the factoring company will take all assoicated risks and rewards. i.e you will have to pay the factoring company regardless of what happens with the company that went into administation...

Blondie

Thanks for that, very useful.