A type of factoring in which the trader’s clients are notified to pay the factor, and are not required to make payments to the trader (seller of debt). That is, the seller of debt does not collect the dues to remit to the factor later on. The clients are aware of the arrangement between the factor and trader.

Disclosed factoring can be either recourse (recourse factoring) or non-recourse (non-recourse factoring), depending on the agreement between the two sides.

It is also referred to as notification factoring.