Asset-based revolving facility
An asset-based revolving facility is a line of funding you can draw, repay and draw again. Its limit is a set share of the receivables and stock that qualify, so it rises and falls as they do.
Forfaiting
Forfaiting lets an exporter sell the importer's promise to pay later, such as a promissory note or bill of exchange, to a forfaiter for cash now, without recourse. It suits long credit on capital goods, commodities and large projects.
Invoice discounting
Invoice discounting lets a seller sell its unpaid invoices to a finance provider and get the discounted value early, while it keeps running its own customer accounts. The buyer pays on the due date, and the deal can stay confidential.
Factoring
Factoring lets an exporter sell its unpaid invoices to a factor and get around 80% of the value up front, with the rest when the buyer pays. With non-recourse factoring, the factor also takes the risk that the buyer cannot pay.
Factoring and invoice discounting fund the same invoices, but differ on who collects from the buyer
Both sell invoices to a finance provider at a discount. In factoring the provider usually runs the ledger and collects; in invoice discounting the seller keeps the ledger and the financing may be undisclosed to the buyer.
Receivables finance turns issued invoices into cash, a market FCI puts at EUR 4.04 trillion a year
Receivables finance lets a seller turn invoices it has already issued into cash before the buyer pays. The finance provider advances a share of the invoice, usually around 80% in factoring, and releases the balance less fees and discount when the buyer pays.