Discover more about receivables factoring – and related terms – with this helpful business funding glossary from MP Star Financial.

Real Property: Real estate.

Replevin: A legal proceeding in court to seize property (other than real estate) given as security for a debt that is in default.

Reserve: An amount withheld by the factor net of the receivables factoring advance. It is used as a financial cushion to offset against payment shortages, client and the customer disputes, or bad debt losses due to non-payment. The reserve should be released to the client after the customer has paid the factor the total money due on the invoice.

Reserve Release: This is the process of the factor releasing final monies due the client once an invoice has been totally satisfied, less any applicable fees or charge-backs.

Satisfaction: The discharge of an obligation by paying what’s due (i.e., the satisfaction of an IRS lien or the satisfaction of a security interest holder).

Security Interest: An interest in property, other than real estate, which is given as security for a debt or other obligation. A security interest is created by execution of a security agreement and one or more financing statements under the Uniform Commercial Code.

Seller: A person or company with assets that are legally able to be sold.

Sole Proprietorship: A business owned and operated by an individual.

Subordination: The act of a creditor acknowledging in writing that a debt due him or her by a debtor shall be inferior to the debt due another creditor by the same debtor.

Interested in learning more information about receivables factoring as a source of business funding? Please call MP Star Financial toll-free at 1-800-833-3765, ext. 150 today or email your business funding questions about receivables factoring.