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Glossary of Credit Management Terms. Letter
F
Factoring:
Factoring is a financial service by which
a concern operating as a “Factoring House” or “Factoring
Agency” will buy outright the debts of a client. The latter
is then relieved of losses it may incur because of slow payment
or financial difficulties of a customer and the trouble of collecting
outstanding accounts.
Firm:
A business unit formed for the purpose of
carrying out some kind of trading activity. The term “firm”
is used in many ways, but the correct meaning is a business carried
on under a trading style by partners. Many people use the term “firm”
to embrace any business, i.e., Private Limited and Public Limited
companies but this is technically incorrect.
Fixed assets:
Tangible and intangible assets with a relatively
long life, acquired to produce goods or services and not intended
for resale. Includes financial assets such as trade investments.
Fixed charge:
A charge over a specific asset or type of
asset, e.g. machinery, property, book debts, etc.
Fixtures/equipment:
The current book value of fixtures and fittings
after allowing for depreciation.
Floating charge:
A charge created by a company over all company
assets for the time being. The lender has no immediate right over
the assets but upon crystallisation of the charge he or she can
enforce against any or all of the assets covered by the charge.
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