Debt Factoring

• Debt Factoring

  • Involves the firm selling its debt for less than face value.
• Advantage:

  The factor chases up the unpaid debt, saving the company time and money.
• Disadvantages:

  Factors tend to be interested in only large outstanding debts as they can earn more profit.
• Disadvantages:

  The business does not receive the full amount of the outstanding debt.