Factoring is a financing instrument or financial product to short term lead to all types of companies, but in special to those  that they sell his products on credit to his buyers.

In addition, the factoring offers additional services of management, administration and guarantee in case that debtors do not pay, so they are insolvent.

There are 3 parts that participated in a factoring operation:

1.Client: is the company that issues a trade credit.

2.Debtor: is the part that obligated to pay the trade credit.

3.The factoring company.

There are four principal types of factoring:

1.Recourse factoring: The client company respond to the debtor insolvency.

2. Factoring without recourse: the factoring company respond to the debtor insolvency.

3.Factoring with notification: The factoring company notify all debtors that now it is going to be the titular of the credit rights. After that, debtors must pay the credit to the factoring company.