Voluntarily agreeing to the terms of an offer, creating a contract, often seen in the prepayment to the client by the financier.

Recognition that a debt has been assigned to the financier or other security taken, typically outlined in an agreement between parties.

Additional Service Fee:
Fee payable for ongoing collection costs or continued funding of a debt outstanding beyond a specific period.

Administration Charges:
Fees covering additional services or risk applied in managing an invoice finance facility.

Aged Creditor Report:
Analysis of amounts owed to creditors by due date or invoice date.

Aged Debtor Report:
Analysis of outstanding debts by due date or invoice date.

Agency finance:
Financing dedicated to servicing agencies, such as MONET's EarlyPay, which is a form of invoice finance for agencies.

Person appointed to act on behalf of another, often seen when the client acts as an agent for the financier in collecting outstanding debts.

All Asset Debenture:
Security document creating fixed and floating charges over all assets of the entity.

Arrangement Fee:
Fee charged at the commencement or variation of a facility, reflecting investment and management costs.

Asset-Based Finance:
Finance provided based on the assets within a business, including invoice finance and asset-based lending.

Asset-Based Lending:
Agreement where a business pledges collateral, such as stock, machinery, or property, for a structured facility combining secured loans and revolving credits.

Assignment of a debt or receivable under Scots law.

Transfer of ownership of any asset, including debts.

Assignment, Notice Of:
Notice informing a debtor that debts have been assigned to the financier and payment should be made to them.

Entity to which a debt is assigned (assignee) or transferring the asset by assignment (assignor).

Amount of money available to the client under a finance arrangement at a specific time.

Bad Debt:
Unpaid debt due to protracted default or insolvency of the debtor.

Bad Debt Protection:
Mechanism to mitigate the impact of bad debts, provided as part of recourse or non-recourse facilities.

Ban on Assignment:
Clause prohibiting assignment of the contract or debts.

Book Debts:
Amounts owed to a business by its debtors, also known as accounts receivable.

CHOC (Client Handles Own Collections):
A hybrid of factoring and invoice discounting where the client manages credit control for a specified period.

Deeds of Priority:
Contractual arrangements between security holders regulating priority, rights, and realizations from assets.

Entity entering an asset-based finance agreement.

Client Account:
Theoretical value due to the client if all debts were paid immediately.

Collect Out Fee:
Fee covering costs of collecting a sales ledger post-client insolvency.

Concentration Limit:
Maximum funding against debts in a specified category.

Confidential Facility:
Invoice financing where the debtor isn't notified of the assignment.

Contra Trading:
Buying from and selling to the same debtor, impacting debt value.

Contract of Sale:
Agreement between client and debtor for goods or services supply.

Correspondent Factor:
Factor acting as an import/export partner in the two-factor system.

Agreement in the invoice finance contract, breach may restrict funding.

Credit Protection:
Insurance to protect against defined non-payment circumstances.

Credit Limit:
Max value of outstanding debts covered by bad debt protection.

Credit Note:
Document reducing or extinguishing the value of an associated invoice.

Monetary obligation owed by one entity to another.

Debt Collection:
Collecting unpaid debts, may include legal action.

Debt Turn:
Measure illustrating the average time for debts to be paid.

Debt Verification:
Process confirming the validity of debts.

Debt, Approved:
Debt eligible for funding and notified to the financier.

Debt, Disapproved/Unapproved/Ineligible:
Debt not meeting funding criteria.

Debt, Disputed:
Debt subject to a debtor dispute, may be withdrawn from funding.

Debt, Excluded:
Debts not covered by an invoice finance agreement.

Debt, Notifiable:
Debt within the scope of a financing arrangement.

Debt, Take On:
Value of receivables notified to the financier at the facility's start.

Entity obligated to make payment for goods or services.

Situations reducing the value of an outstanding invoice except debtor default.

Direct Banking (By a Client/Customer):
Banking proceeds into an account other than specified by the financier, a breach of agreement.

Direct Payment (By a Debtor):
Debtor payment into a non-specified account, also a breach.

Discount Charge/Fee:
Fee levied against funds in use, calculated similarly to interest.

Domestic Factoring:
Factoring where both client and debtor are in the same country.

Export Debt:
Debt payable by a debtor outside the supplier's country.

Export Factoring:
Factoring where the client assigns debts from debtors in another country.

Purchase of outstanding debts by a factor, who administers the client's sales ledger and collects debts in their name.

Funding Limit:
Max value of outstanding debts owed by a specified debtor eligible for funding.

Funds In Use (Account):
Balance owing to the financier at a given time, comprising prepayments, fees, and charges less debtor payments.

Future Debt:
Debt coming into existence after the facility's start.

Import Factoring: Factoring where an import factor collects debts from a debtor in the same country.

Inter-Factor Transfer:
Transfer of a client from one invoice financier to another.

Invoice Discounting:
Purchase of outstanding debts by a financier, but the client administers its sales ledger and collects debts.

Invoice Finance:
Finance based on the purchase of a client's debts, including factoring and invoice discounting.

Invoice Finance Agreement: Legal agreement enabling the sale and purchase of a client's debts.

Maximum Funds In Use:
Max amount a financier provides to a client under a funding facility.

Minimum Period:
Minimum length a financing arrangement must be in place before termination.

Non-Vesting Debts:
Debts where ownership isn't transferred but held in trust for the financier.

Notice Period:
Time notice must be given before terminating a facility.

Process of informing the financier of a created debt.

Offer Letter:
In-principle offer detailing main commercial terms for a facility.

Amount by which funds drawn exceed availability.

Payment in advance of all or part of the purchase price of assigned debts.

Prepayment Percentage:
Percentage of approved debt value for prepayments.

Recourse Invoice Finance:
Form of invoice financewhere the risk of non-payment by debtors remains with the client, which is how MONET conducts our EarlyPay product.

Non-Recourse Invoice Finance:
Form of invoice finance where the risk of non-payment by debtors is transferred to the financier.

Recourse Period/Funding Period:
Duration during which a financier provides funding against a debt, after which uncollected debts may be unapproved.]

Amount held back from availability to cover risks or debts outside funding criteria.

Retention of Title (ROT):
Supplier's retention of ownership until payment, providing security against default or insolvency.

Sales Ledger Account:
Amount owed to a client by its debtors, minus credit notes and payments received.

Service Fee Charge:
Charge for provision of invoice finance facility, often a percentage of assigned invoices or a fixed monthly fee.

Supplier Finance/Supply Chain Finance:
Services offering credit support for suppliers, often involving reverse factoring.

Take On:
Process of verifying and loading a sales ledger onto a financier's system for funding commencement.

Termination Event/Default Event:
Event allowing termination or acceleration of a facility, such as breach of terms or insolvency.

Termination Fee/Break Fee:
Fee charged if the agreement is terminated before its agreed term.

Trust Account/Specified Account:
Bank account where proceeds of funded debts are held on trust for the financier.

Two-Factor System:
System used in export factoring where a factor uses a correspondent factor to collect debts from a debtor in another country.

Undisclosed Factoring/Confidential Factoring:
Factoring where notice of assignment isn't given to debtors until required by the factor.

Value Date:
Date on which a transaction is considered to have occurred, often used in determining interest or fee calculations.

Verification Process:
Process undertaken by a financier to confirm the validity of debts, often involving communication with debtors.

An agreement to waive a particular right or claim, often seen in invoice finance agreements regarding breaches or defaults.

Working Capital:
Capital available for day-to-day operations of a business, often financed through invoice finance to manage cash flow.

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