Rebate is the amount of funds returned from the factoring agent to the client from the factoring reserve.
Notification refers to whether or not the end customer – the account debtor – is aware that the account receivable has been factored. When the customer is aware, payment will typically be made to the factor in the factor’s name. In the case of non-notification, the customer does not know that the debt has been sold. The customer continues to make payment using the factoring client’s name. Payment is most often remitted to a lockbox and subsequently deposited into the factor’s account. When the customer is contacted in a non-notice situation, the factor identifies itself by the name of the factoring client.
A lockbox is a service most commonly offered by a bank whereby the end customer remits payment to a PO Box; the bank periodically gets those payments and deposits them into the lockbox owner’s account.
Liquidity refers to the ability to convert an asset to cash. Cash on hand is, of course, 100% liquid. Most current assets are considered to be liquid. The generally accepted accounting principles definition of liquidity is the excess of current liabilities over current assets.