Factoring Company- Glossary > Factoring Terms > Reserve


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Refers to the amount withheld by the factor net of the advance. Can be used as a financial cushion to protect against shortages, disputes between the client and the customer or bad debt losses due to customer non-payment. The reserve should be released to the client after the customer has paid the factor the total money due on the invoice.

Last updated on September 28, 2009 by FACTOR KING, LLC