What is it?


Factoring or financial assignment consists in the acquisition of short-term credits derived from the sale of products or provision of services in the internal and external markets.


According to the Decree-Law n.º 171/95: The activity of Factoring includes complementary actions of collaboration between Factoring Societies and its clients, namely, credit risk studies and the accounting and legal commercial  support towards the good management of the assigned credits. [ALF’s translation]

Involved parties:

Factor: factoring company
Client (Assignor): the company which is the Factor’s client
Debtor:who has a debt to the Client (and who is his client)

Related Services:

  • Financing, advancement over invoices related with the transaction of commercial credits
  • Credit collection services
  • Information services (commercial, accounting)
  • Legal assistance (litigation, etc.)
  • Credit risk studies
  • Assignment of credit limits per Debtor (security in sales on credit).

Targets and advantages


Factoring may be used by all companies, SME’s or large enterprises, which sell on credit to its clients in the domestic and external markets. It is the most cost-effective, agile and efficient tool with the capacity to manage all issues arising from sales on credit and the long payment periods, allowing for an optimization of the treasury management.

Due to the ever increasing technological development of Factoring, there is an increasing wider range of companies with a smaller invoicing volume which can benefit from the advantages of resorting to Factoring.


  • Simplification of the credit management operations;
  • Allows for immediate liquidity through the financing of sales;
  • Allows for a better planning of the treasury;
  • Transforms fixed costs into variable ones, by outsourcing collection which matches costs with the companies’ sales cycle;
  • Reduces administrative costs in human resources and communications;
  • Increases the financing capacity and improves the debt ratios;
  • Security in credit sales;
  • Increases the efficacy of the commercial department:
    • Exclusive dedication to technical and commercial tasks
    • Expansion not limited by treasury difficulties

What it finances

National Factoring:

As the name indicates, it is Factoring where all involved parties are headquartered in the same country. The most common variants are:

Recourse Factoring
In this variant, the Client benefits from the collection and credit management services and may also choose to use the financing of the assigned invoices. The Factor has the right of return over Clients for invoices which are not paid within the payment deadline (reassignment).

Non Recourse Factoring
The Factor’s Client benefits from the credit management and collection services, as well as risk coverage in the event of the debtor’s insolvency and/or credit default. The client can also choose to have the funds anticipated. This type of Factoring confers an added security to credit sales.

Full Service Factoring
This is, in a general sense, the more complete Factoring product design, meaning the client assembles the three essential factoring components in the same product: Management and collection services, coverage of commercial risks of insolvency and/or default of the Debtors, and anticipation of funds (advances) over the receivables portfolio.

“Confirming” or “Reverse Factoring”
Among the different Factoring categories, there is “Confirming” or “Reverse Factoring”, through which the Factor pays the supplier of its Client. This payment may also assume the form of an advance in which case the supplier becomes the Client of a factoring contract.

International Factoring

It may be Import – national Debtor and a foreign Client, or Export – national Client and foreign Debtor. In any case, the services mentioned in the other points are always available to the Client, with the variants mentioned for National Factoring also being valid.

Factoring description

Funding periods:

There are no legal limitations.

Funding amounts:

Up to 100% of the Client companies’ invoicing.


Stamp Duty (Imposto de Selo): subject to, every time a credit component exists (except on related commissions)


Decree-Law n.º 298/92, 31st of December – General Regime of Credit Institutions and Financial Societies

[last change: Decree-Law n.º 190/2015, 10th of September]

Decree-Law n.º 171/95, 18th of July – Regulates Factoring Societies and the Factoring Contract

[last change: Decree-Law n.º 100/2015, 2nd of June]

Statistical information

Conditions of access to the statistical information by non-members:


1. On request, ALF will make available to any potential new operator wishing to study their entry in any of the sectors where ALF’s members are present, all the information that it possesses and that may be required for this purpose, without prejudice of the individualized data, if requested, being made available 6 (six) months after its distribution to the members who report data.


2. To access the statistical information pertaining to the activities of Financial Leasing and/or Factoring, the requesting entity must be a Credit Institution or a Financial Institution with the corresponding authorization by the Banco de Portugal, or with a pending authorization process, providing for this purpose the certifying documentation.


3. The statistical information request must be sent in writing to the e-mail address alf@alf.pt, accompanied with the mentioned documentation in the previous point, if applicable.


4. The standard historical track record of the statistical information will be of up to 5 years, with a case-by-case analysis for requests with a larger track record.


5. Depending on the volume of statistical information requested, the usual reply period shall be of 10 working days which may be extended to 20 working days depending on the volume and detail requested and the dimension of the historical track record.

Production of Portuguese Factoring (Credits Taken)


European context of Factoring


Factoring weight % of GDP


Link to the conditions of access to the statistical information by non-members


Monthly statistical information - Factoring - March 2022