What is a factor guarantee?
The easiest way to understand factoring is to think of it as a Visa or MasterCard for the business. When a retail customer makes a purchase and presents his credit card, the merchant transmits the information to the credit card company and requests a credit approval for the amount of the transaction. If the amount is within the purchaser’s credit limit, the credit card company provides the merchant with an approval number and agrees to accept the risk in case the purchaser is financially unable to pay.
