Factoring is the financing of the invoices you issue to your customers. You transfer Faktoro the rights of claim according to the invoice issued to your buyer (debtor) with a deferred payment term. Faktoro immediately pays you up to 90% of the invoice amount. Upon payment of the invoice by the debtor, Faktoro deducts the fee for the factoring service and transfers you the balance.
Factoring is the most convenient financing tool for small and medium businesses as financing grows along with growing sales.
The legal definition of factoring is provided for in Article 903 of Book VI of the Civil Code of the Republic of Lithuania: Concept of the factoring agreement