Reserve release

When the factor pays the seller the held-back portion after the customer pays and fees are deducted.

Why it matters

Reserve release timing depends on customer payment, fee deductions, and contract cross-collateral rules. Delayed release reduces working capital between funding cycles.

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.