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Factoring

factoring (selling receivables to a third party for immediate cash)

noun FAK-to-ring Rare
People & Society Money

Origin: from English 'factoring', itself from Latin 'factor'

Usage Note

Factoring allows businesses to sell their outstanding invoices to a Factoringgesellschaft at a discount, receiving liquidity immediately instead of waiting for customers to pay. It is widely used by mid-size German companies (Mittelstand).

Examples

"Durch Factoring konnte das Unternehmen seine Liquidität kurzfristig verbessern."

Natural Translation

Through factoring, the company was able to improve its liquidity in the short term.

Literal Translation

Through factoring could the company its liquidity short-term improve.

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