Investment glossary terms beginning with the letter F:

Factoring – A financial service provided by a financier, or factor, where a business sells its accounts receivable at a discount in exchange for immediate payment. The factor collects his fee upon collecting from the debtor. Factoring transactions are entered into under either a recourse or non-recourse arrangement. Factoring with recourse leaves the credit and collection risk with the business selling the receivable, whereas factoring without recourse transfers the credit and collection risk entirely to the factor. Factoring is used by businesses as a tool to speed up cash flow to help reduce the need for debt or equity financing.

Fair Market Value – An agreeable open-market price paid by a willing but not desperate buyer to an interested but not desperate seller, assuming there is sufficient time for an agreement to be reached.

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