The factoring and commercial finance industry offers a wide range of products and services, which are extensively used by European firms to make their business grow.
Although the core of the service is still the same and is very simple (a complementary source of finance based upon the assignment of receivables or other assets held by the businesses), among the EU Countries the products offered have developed in different ways, following the different economic and productive structures as well as the legal environments present in each Country. The EU Federation for the Factoring and Commercial Finance Industry, as the representative body of the industry in the European Union, wishes to contribute to the establishment of a standard terminology concerning commonly used terms, with the aim of improving communication and knowledge about the Industry across Europe.
Therefore, after long and interesting rounds of discussions between its members, the Economics and Statistics Committee of the EUF drafted the EUF Glossary on Factoring and Commercial Finance, with the aim to provide the reader with a general taxonomy of the most common products and services offered, but also of the terms associated, in the EU factoring markets.
Such a glossary does not claim to be complete and exhaustive, but it will definitely be useful for a number of subject involved with the factoring and commercial finance industry: the EU bodies that are responsible of issuing the regulation concerning the industry will be happy to have an explanation of some specific terms that they may encounter while discussing the issues; the businesses will find in it a helpful tool to orient themselves through products and services that still remain unfamiliar for many of them (although EU firms are increasing their use of factoring at a fast pace) and, at the end of the day, the factors themselves will benefit from it in different ways, i.e. by disposing of a common tool to refer their own languages and by simplifying communication with their actual and prospect clients, also from an international point of view.
The reader will note that although most of products and services can be classified in the categories listed in this glossary, they may still slightly differ from Country to Country, due to the different economic and legal contexts which affect businesses needs and the demand for factoring and commercial finance services. In future, the ESC will continue monitoring the industry and the markets in order to update and adjust the glossary when needed, with the final objective to pursue, as far as possible, the establishment of a standard terminology for the factoring and commercial finance market across the EU.