Notification Factoring
A factoring arrangement where the business's customers are formally notified that their invoices have been sold and instructed to pay the factoring company directly.
Under notification factoring, the factoring company typically handles collections directly with the customer, which shifts that responsibility away from the business but also makes the factoring relationship visible to customers.
This is the more common and traditional form of invoice factoring, and some businesses weigh how visible they want the arrangement to be to customers when deciding between notification and non-notification structures.
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