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.