Posted by admin in Glossary

The advance rate is the discounted percentage that the factor pays to the client when purchasing accounts receivable. The actual rate, expressed as a percentage such as 90%, is based on the amount of risk assumed by the factor. In general, the lower the likelihood of collecting the receivable, the lower the advance rate that is provided. Also see Full With Recourse and Factoring without Recourse.

2 Responses to “Advance Rate”

1. 1
   Factoring with Recourse Pinged With: @8:13 pm 
   

   [...] debt). Because there is less risk to the factor involved, factoring fees are usually lower and the advance rate higher than factoring without recourse. Because there is less risk to the factor involved, [...]

2. 2
   Factoring without Recourse Pinged With: @8:15 pm 
   

   [...] Because there is more risk to the factor involved, factoring fees are usually higher and the advance rate lower than factoring with recourse. Though the factoring agent assumes risk, the client usually [...]

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