This refers to a factoring arrangement in which the factor remits monies to the client based on the maturity, or the average due date, of accounts receivable assigned to the factor in a given month. This type of arrangement is much less common today and is used only with certain "wholesale" accounts, where the client's customers are manufacturers, not retailers. Much more common today are "Advance Factoring" and "Collection Factoring" arrangements (see above).
An arrangement whereby the factor performs the entire credit and collection function and remits to the seller for the receivables sold each month on the average due date of the factored receivables. The factor's commission ranges from 0.75% to 2%, depending upon the bad debt risk and handling costs.