(Entry 1 of 2)
Definition of factor (Entry 2 of 2)
Noun
Verb
In Latin factor means simply "doer". So in English a factor is an "actor" or element or ingredient in some situation or quantity. Charm can be a factor in someone's success, and lack of exercise can be a factor in producing a poor physique. In math we use factor to mean a number that can be multiplied or divided to produce a given number (for example, 5 and 8 are factors of 40). And in biology a gene may be called a factor, since genes are ingredients in the total organism.
Noun
15th century, in the meaning defined at sense 1
Verb
1621, in the meaning defined at intransitive sense
Noun
Middle English factour "doer, perpetrator, commercial agent," borrowed from Anglo-French & Latin; Anglo-French, borrowed from Latin factor "maker, creator, perpetrator" (Medieval Latin, "commercial agent, broker"), from fac-, stem of facere "to make, bring about, perform, do" + -tor, agent suffix — more at fact
Verb
verbal derivative of factor entry 1
Synonyms for factor
Words Related to factor
Synonyms for factor
Words Related to factor
Near Antonyms for factor
Antonyms for factor
factor
nounWhat It Is
A factor is a financial institution that purchases receivables from a company.
How It Works
Let's say Company XYZ sells widgets. It has about $1 million in receivables from customers who have not paid for their widgets.
Company XYZ needs cash right away because it is trying to finish building a new factory. It calls a factor, which purchases the receivables for $750,000. In the deal, Company XYZ gets $750,000 right away, and the factor gets the right to all the money from the receivables ($1 million). The factor then assumes the risk of customers paying late or not at all.
Why It Matters
Factors and factoring can be complicated, but the basic idea is that companies can trade cash flows later for cash flows now, which is useful for companies that need cash right away. It can also be expensive, as the example shows (Company XYZ gave up $250,000 of its receivables for the deal).
Because factors assume the risk of collecting the receivables, they are choosy about which companies they work with and the creditworthiness of the companies' customers.
Source: Investing Answers
factor
noun(Entry 1 of 2)
factor
verbEnglish Language Learners Definition of factor (Entry 2 of 2)
factor
noun(Entry 1 of 2)
factor
verbKids Definition of factor (Entry 2 of 2)
factor
nounfactor
noun