Factoring

Factorability of debt

 

The following debts are not factorable:

1. Sales or return arrangement

This refers to an arrangement where the goods are placed at the debtor place and are consider sold only when it is sold to the ultimate customer. Goods which are not sold will be returned. This is common for sales to supermarket such as NTUC Fairprice, Cold Storage.

2. Consignment sale

3. Prohibition against assignment

4. Progress payment arrangement

5. Client with floating charge

6. Goods under Trust receipt

7. Goods subject to warranties

8. Sales to public

9. Credit terms above 180 days.

10. Right of set off

11. Deposit invoice or Advance payment

12. Contra sales

Experienced factors are able to implement controls to overcome some of non factorable debts!