Account purchase

The transaction in which the factor buys a specific invoice or account.

Why it matters

Each account purchase creates an advance obligation, a reserve holdback, and a fee accrual. The cumulative effect of multiple purchases is tracked in the reserve account.

Related terms

Related article: What is invoice factoring?

Related reading

Sources

  • International Factoring Association - International Factoring Association. Accessed 2026-05-19. Industry association source for factoring terminology and industry context.
  • Secured Finance Network - Secured Finance Network. Accessed 2026-05-19. Industry education source for secured finance and asset-based lending context.
Financial disclaimer. This page is educational only and is not financial, legal, tax, accounting, or credit advice. Factoring terms vary by provider and contract. Read the full disclaimer.