Debtor credit check

A review of the account debtor payment risk before the factor approves invoices.

Why it matters

Credit approval of the account debtor determines funding eligibility, advance rate, and in non-recourse programs whether the factor assumes credit risk.

Related terms

Related article: What is invoice factoring?

Related reading

Sources

  • International Factoring Association - International Factoring Association. Accessed 2026-05-19. Industry association source for factoring terminology and industry context.
  • Secured Finance Network - Secured Finance Network. Accessed 2026-05-19. Industry education source for secured finance and asset-based lending context.
Financial disclaimer. This page is educational only and is not financial, legal, tax, accounting, or credit advice. Factoring terms vary by provider and contract. Read the full disclaimer.