Glossary
Concentration - this is the percentage of your debtor book that is outstanding to your largest customer. For example if you are factoring and your largest customer accounts for 80% of your debtor book the factoring company would view this as an 80% concentration.
Concentration Limit - most factoring and invoice discounting companies will impose a concentration limit. They may only fund a single debtor up to a given percentage of your debtor book. This can seriously impact on your funding and should be addressed at the outset.
Dilution - factoring and invoice discounting companies will look at how the value of the invoices you issue is eroded by credit notes, retrospective discounts, retentions, etc.. This is referred to as dilution.
Prepayment Level - the amount a lender will prepay against each invoice.