Factor

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1. A Factor is a person who provides financing to a business by purchasing its receivables rather than by making a loan to the business which is secured by the receivables. In a 'non-recourse' factoring arrangement, the factor may not seek reimbursement from the seller of the receivables if a receivable proves to be uncollectible. In a 'recourse' factoring arrangement, the factor may seek reimbursement from the seller for losses (or, at least, certain types of losses) if a receivable proves to be uncollectible.

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