Glossary
Factoring
Factoring (affacturage)
Factoring is the contract by which a company transfers its trade receivables to a factoring company, which advances their amount and collects them.
Definition
Factoring is the contract by which a company transfers its trade receivables to a factoring company, the factor, which advances their amount, manages the receivables ledger and collects the invoices. The factor bears the debtors’ insolvency risk in non-recourse factoring and leaves it with the company in recourse factoring. In 2025, factors handled €439.6bn of invoices in France, or 14.8% of GDP. Mid-caps held 50.5% of outstandings at 31 December. Under delegated management, which accounts for 76% of domestic production, the company keeps responsibility for reminders and collection. The site’s Receivables financing programme page presents factoring, the Dailly assignment and securitisation for needs of €20m or more.
Worked example
A food industry mid-cap generates €300m of revenue with customers that pay at 60 days. Its outstanding receivables reach about €50m, or one sixth of its revenue. A factoring contract under delegated management finances this €50m as soon as the invoices are issued, less the guarantee fund that the factor holds back.
Points to check
- Compare the factoring fee, calculated on the revenue assigned, with the financing fee, indexed to 3-month Euribor.
- Choose between notified and non-notified factoring according to your relationship with your customers.
- Negotiate the amount of the guarantee fund and the interest paid on it.
Contact