The paper deals with a particular offshoot of factoring, variously termed as indirect factoring, reverse factoring or supply chain finance. In a typical reverse factoring arrangement, the factor agrees with a large company at the top of a supply chain to pay the company’s debts vis-à-vis its suppliers in exchange for a fee. In spite of the growing demand for this new finance technology and of the voluminous management literature that have praised its virtues, reverse factoring has gone largely unconsidered by lawyers, who tend to equate it to traditional receivable financing. Through the analysis of the evolution of the contract in Italy, Spain, Germany, United Kingdom and France, the article aims to prove that reverse factoring has features and raise problems that are substantially different from those characterizing ordinary receivable financing and that deserve to be fully explored.
