# Factoring

- Canonical URL: https://www.gerhardmerk.de/factoring
- Post ID: 587326
- Modified: 2023-07-25T21:00:12+00:00
- Language: en

## Definition

A special type of credit transaction, namely the commercial acquisition of monetary receivables, usually from companies that have sold goods with payment terms to commercial customers; i.e., receivables pre-financing (a credit transaction whereby a company, holding an outstanding commercial bill of exchange, transfers it to its bank or to a specialized financial institution in exchange for the payment of the bill, less interest and commissions, and fees). Corresponding companies (factoring companies) are called factor in legal terminology and are classified as financial companies in Germany pursuant to Section 1, Paragraph 3, № 4; since December 2008, they have required a license and are subject to supervision by the Federal Financial Supervisory Authority. - Hedge funds have increasingly penetrated this market segment since around 2000; in 2005, for example, hedge funds bought loans of more than EUR 500 million granted to the creditor banks of the German department store group KarstadtQuelle. - See cannibalization, accounts receivable management, event-driven fund, factoring, non-genuine, maturity factoring, finance companies, self-factoring, security retention, ultimate factoring, V-institutions, cession credit. - Cf. BaFin's 2008 Annual Report, p. 109 et seqq. (permit criteria for factoring), BaFin's 2009 Annual Report, p. 158 (simplified permit procedure until the end of January 2009), BaFin's 2010 Annual Report, p. 174 et seqq. (composition of institutions; regulatory issues; risk classification), BaFin's 2011 Annual Report, p. 175 (trend toward market consolidation; new permit holders), and the respective BaFin Annual Report, chapter "Supervision of Banks, Financial Service Providers and Payment Institutions." Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

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