Business A-Level
debt factoring
What debt factoring means in Business A-Level, as defined for AQA.
Definitions of debt factoring
Exam boards and our study guides word this term in slightly different ways. Learn the version your board uses.
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Read the wording for your board, then hide it and explain debt factoring in your own words. Rough notes are fine. This is a self-check, with no mark or grade.
Reference: AQA
Selling the sales ledger for roughly eighty to eighty five per cent of face value now, so cash arrives in days rather than at the end of the credit period.
Selling invoices at a discount for immediate cash.
Topics that use debt factoring
- Making financial decisions: improving cash flow and profits (AQA A-Level)
- Making financial decisions: sources of finance (AQA A-Level)
Related terms
- cash flow versus profit
- constraints on small firms
- credit control
- equity
- equity finance
- margins and return on capital employed
- overdraft
- price elasticity of demand
Using debt factoring in the exam
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