Glossary

Usage or drawing by the Assignor of funds made available by a Factor or a lender based on an asset (invoice)

Renting or operational leasing of vehicles (AOV) is a solution that makes a car available to individuals and companies, through a rental contract with associated services, for a predetermined period and mileage and against payment of a rent. This rent includes the cost of the rental, maintenance, and other contracted services.

The entity to which an Invoice is assigned.

The transfer of Invoices from the Assignor to the Assignee.

The entity disposing of an invoice by an Assignment.

Form of Factoring in which the Assignment has not been notified to the debtor. The Assignor retains total control over the management of collections with the possibility to use a dedicated banking account for that operation.

A service offered by a factoring company in which it accepts the risk of non-payment (default or insolvency) in the event that the debtor is unable to pay its debt.

Network of businesses whose common aim is to facilitate international trade through Factoring, linking the Factors of the different countries to collect locally in those countries.

A business that has been supplied with goods or services by the Client and is obliged to make payment for them to the Factor, since its debts have been assigned/sold to a Factor.

A financial institution providing Factoring facilities.

Legal term used to describe the product which is usually called Leasing in Portugal. It is a unique way to finance assets, equipment or real estate, which is clearly distinguished from a loan because the use of an asset is made available and not the delivery of capital to acquire that asset. As the asset is acquired by the lessor to make it available to the lessee, the security of the operation is increased for all parties, with inherent advantages at several levels.

Synonym for Renting company.

Document issued by the Seller to the Buyer, where information regarding the value of the credit to be paid and payment conditions are registered, among others.

Refers to the asset which is leased in a financial leasing contract. It is common to be called, in Portuguese, “coisa locada” or “bem locado”.

The client in a Financial Leasing contract.

The financial institution which makes Financial Leasing available.

A notice issued by the Assignor to a Debtor which informs him that its related (total or partial) debts payable have been assigned to the Factor.

It is the technical term for Renting.

At the end of a financial leasing contract there is always a “purchase option” for the lessee to acquire the leased asset. If no “purchase option” exists, than we are not in the presence of a financial leasing contract but something else.

At the end of the Renting contract, generally, the vehicle is delivered to the Renting company to be sold. In this sense, the vehicle must be returned in conditions of normal use, being admitted a certain wear and tear according to its age and mileage. The process of returning and inspecting the vehicle at the end of the contract is called reconditioning.

It is the value over which the leased asset can be acquired by the lessee at the end of the financial leasing contract, should he so wish. Usually, this residual value is pre-agreed at the beginning of the contract.

Form of Factoring in which the agreement is set up between the Factor and a (usually strong) Debtor and the Factor offers each supplier the possibility to assign/sell those Receivables approved for payment by the debtor.

System whereby a Factor uses, by sub-Assignment, a Factor in another country (correspondent Factor) to collect the Receivables of an Assignor exporting to a customer in that country with or without Credit protection and Advancement. The relationship between the Correspondent Factors is usually governed by a previously established Interfactor agreement.