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Factoring, in its simplest terms, is the process of selling a company's accounts receivable to obtain working capital. There are various types of factoring, and the tutorial focuses on non-recourse full notification factoring. In this type, account debtors (the clients' customers) are informed to pay the factoring company directly instead of the original supplier, which takes on the credit risk of non-payment. This provides clients with a form of credit insurance for their receivables. The speaker, experienced in SBA lending, notes that many may be more familiar with loans, and in factoring, the equivalent term for a loan is a factoring facility.