A/R Finance & Factoring Terms GLossary

What isVendor Guarantee

A Vendor Guarantee or Vendor Assurance Program is when goods are pre-sold but your company’s credit and/or time in business will not allow you to buy the goods from your supplier on terms. Think of the Vendor Guarantee as an agreement between your company, your supplier, and your invoice factoring company.

If you have a bulk order to fulfill and are falling short of credit from your supplier, then the factoring company agrees to pay your supplier directly from the proceeds of factored invoices. Paragon acts as a guarantor to your supplier that they are paid if the goods meet quality, quantity, and timeliness specifications and are received and approved by your customer (the Account Debtor). Paragon many times offers our clients a Vendor Assurance Program with our Invoice Factoring Facilities.

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