A factor buys accounts receivables at a discount with or without recourse. In recent years several domestic factors have established foreign affiliates or invested in foreign companies and several banks have purchased or established factoring firms to finance foreign trade. Branches are also financing foreign trade by factoring. The factor assumes the credit and collection risk associated with the receivables. Among the principle advantages of factoring to the client, is that the client is certain of the collection of the proceeds of its sales, regardless of whether or not the factor is paid. The client does not have to maintain a credit department to evaluate the creditworthiness of customers and collect past due accounts or maintain book keeping or accounting records pertaining to the status of receivables. Two basic types of factoring are maturity factoring and advance factoring. (Federal Reserve-Branch and Agency Examination Manual)