A/R Finance & Factoring Terms GLossary

What isValidity Guarantee

A Validity Guarantee is a special kind of guarantee used in Invoice Factoring & PO Funding when a small business is owned by many individuals or a corporation. It is a guarantee that states the information submitted on a borrowing base certificate or factored invoices are true and accurate. It holds the signer liable in the case of fraud or misrepresentation but doesn’t hold the signer liable for credit loss if a non-recourse facility.

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