# A Simple Factoring Pricing Model

## TL;DR

This paper presents a straightforward model for pricing invoice non-recourse factoring that considers debtor creditworthiness, assignor creditworthiness, and their default correlation, including effects of bankruptcy revocatory in undisclosed factoring.

## Contribution

It introduces a simplified pricing approach that incorporates both parties' credit risks and their correlation, addressing a gap in existing factoring valuation models.

## Key findings

- The model accounts for default correlation effects.
- It highlights the impact of bankruptcy revocatory on payoffs.
- Provides a practical framework for factoring pricing.

## Abstract

In a simplified setting, we show how to price invoice non-recourse factoring taking into account not only the credit worthiness of the debtor but also the assignor's one, together with the default correlation between the two. Indeed, the possible default of the assignor might impact the payoff by means of the bankruptcy revocatory, especially in case of undisclosed factoring.