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SOUTH AFRICAN QUALIFICATIONS AUTHORITY 
REGISTERED UNIT STANDARD: 

Demonstrate knowledge and understanding of factoring as a lending vehicle 
SAQA US ID UNIT STANDARD TITLE
12736  Demonstrate knowledge and understanding of factoring as a lending vehicle 
ORIGINATOR
SGB Banking and Micro Finance 
PRIMARY OR DELEGATED QUALITY ASSURANCE FUNCTIONARY
-  
FIELD SUBFIELD
Field 03 - Business, Commerce and Management Studies Finance, Economics and Accounting 
ABET BAND UNIT STANDARD TYPE PRE-2009 NQF LEVEL NQF LEVEL CREDITS
Undefined  Regular  Level 4  NQF Level 04  10 
REGISTRATION STATUS REGISTRATION START DATE REGISTRATION END DATE SAQA DECISION NUMBER
Reregistered  2018-07-01  2023-06-30  SAQA 06120/18 
LAST DATE FOR ENROLMENT LAST DATE FOR ACHIEVEMENT
2024-06-30   2027-06-30  

In all of the tables in this document, both the pre-2009 NQF Level and the NQF Level is shown. In the text (purpose statements, qualification rules, etc), any references to NQF Levels are to the pre-2009 levels unless specifically stated otherwise.  

This unit standard does not replace any other unit standard and is not replaced by any other unit standard. 

PURPOSE OF THE UNIT STANDARD 
This unit standard is intended for all learners who work in factoring.

Persons credited with this unit standard will be able to demonstrate knowledge and understanding of traditional business lending, compare factoring to traditional business lending, explain the different types of factoring and match the needs of a business to factoring as a lending vehicle. 

LEARNING ASSUMED TO BE IN PLACE AND RECOGNITION OF PRIOR LEARNING 
There is open access to this unit standard. Learners should be competent in Communication and Mathematical Literacy at level 3. 

Specific Outcomes and Assessment Criteria: 

SPECIFIC OUTCOME 1 
Demonstrate knowledge and understanding of traditional business lending. 

ASSESSMENT CRITERIA
 

ASSESSMENT CRITERION 1 
1.The general principles of traditional business lending are explained in own words according to general banking policy and practice. 

ASSESSMENT CRITERION 2 
2.The role of security and evaluation of security for traditional business lending are explained according to general banking policy and practice. 

ASSESSMENT CRITERION 3 
3.A typical business profile for traditional lending is explained with the use of examples from two different businesses in different sectors of the economy. 

ASSESSMENT CRITERION 4 
4.The approach to business analysis to determine lending required is explained with reference to examples of analysis of actual financial statements of a business. 

ASSESSMENT CRITERION 5 
5.The benefits to the lender and the business are outlined with the use of examples according to the lending principles and role of security in the lending. 

ASSESSMENT CRITERION 6 
6.The key risks to the lender are explained in own words and according to general banking policy and practice. 

ASSESSMENT CRITERION 7 
7.The key risk management issues for the lender are explained with the use of examples according to general banking policy and practice. 

SPECIFIC OUTCOME 2 
Compare factoring to traditional business lending. 

ASSESSMENT CRITERIA
 

ASSESSMENT CRITERION 1 
1.The typical lending requirements making factoring attractive to a business are demonstrated with the use of two different business examples. 

ASSESSMENT CRITERION 2 
2.The concepts of ongoing business trade and debtors, as security for lending are explained in own words with the use of examples in line with existing factoring policy and practice. 

ASSESSMENT CRITERION 3 
3.The key differences in the way a business would be viewed as a candidate for lending from a traditional banking perspective and as a candidate for factoring are outlined in line with factoring policy and practice and good business practice. 

ASSESSMENT CRITERION 4 
4.The key differences in the approach to lending are explained with the use of examples in line with general factoring policy and practice. 

ASSESSMENT CRITERION 5 
5.The benefits and risks of the two approaches to lending are compared from the borrowers perspective according to factoring policy and practice and good business practice. 

ASSESSMENT CRITERION 6 
6.The benefits and risks of the two approaches to lending are compared from the financier's perspective according to factoring policy and practice and good business practice. 

ASSESSMENT CRITERION 7 
7.The key risk management issues for the financier are explained with the use of examples according to factoring policy and practice. 

SPECIFIC OUTCOME 3 
Explain the different types of factoring. 

ASSESSMENT CRITERIA
 

ASSESSMENT CRITERION 1 
1.The concept of discounting of invoices as a form of finance is explained as defined by factoring policy and the financier's marketing approach. 

ASSESSMENT CRITERION 2 
2.The concept of retention of a portion of the invoices offered is explained as defined by industry factoring policy and the financier's marketing approach. 

ASSESSMENT CRITERION 3 
3.The characteristics of full factoring as a type of lending are explained as defined by industry factoring policy and the financier's marketing approach. 

ASSESSMENT CRITERION 4 
4.The advantages and disadvantages to the borrower of full factoring are explained as defined by industry factoring policy and the financier's marketing approach. 

ASSESSMENT CRITERION 5 
5.The lending risks associated with full factoring are explained as defined by industry factoring policy and the financier's risk management approach. 

ASSESSMENT CRITERION 6 
6.The characteristics of invoice discounting as a type of lending are explained as defined by industry factoring policy and the financier's marketing approach. 

ASSESSMENT CRITERION 7 
7.The advantages and disadvantages of invoice discounting are explained as defined by industry factoring policy and the financier's marketing approach. 

ASSESSMENT CRITERION 8 
8.The risks associated with invoice discounting are explained as defined by industry factoring policy and the financier's risk management approach. 

SPECIFIC OUTCOME 4 
Match business needs to the appropriate factoring product. 

ASSESSMENT CRITERIA
 

ASSESSMENT CRITERION 1 
1.The characteristics of a business profile for factoring are described in line with industry factoring policy and the financier's marketing approach. 
ASSESSMENT CRITERION RANGE 
Full factoring and invoice discounting. Evidence of competence across the entire range is required.
 

ASSESSMENT CRITERION 2 
2.The basic finance requirements are identified according to the business's needs. 

ASSESSMENT CRITERION 3 
3.The appropriate match of business need to full factoring is illustrated through a business analysis example according to industry factoring policy and practice and the financier's business approach. 

ASSESSMENT CRITERION 4 
4.The selected factoring solution is compared to a traditional lending approach according to the benefits offered the supplier. 


UNIT STANDARD ACCREDITATION AND MODERATION OPTIONS 
1.Anyone assessing a learner against this unit standard must be registered as an assessor with the relevant ETQA.
2.Any institution offering learning that will enable achievement of this unit standard or assessing this unit standard must be accredited as a provider with the relevant ETQA.
3.Moderation of assessment will be overseen by the relevant ETQA according to the moderation guidelines in the relevant qualification and the agreed ETQA procedures.

Therefore, anyone wishing to be assessed against this unit standard may apply to be assessed by any assessment agency, assessor or provider institution that is accredited by the relevant ETQA. 

UNIT STANDARD ESSENTIAL EMBEDDED KNOWLEDGE 
  • General knowledge of the factoring industry.
  • Operating and computer systems knowledge sufficient to locate the necessary information and complete the task/function.
  • General understanding of the specific risks and relevant policies relating to processing factoring transaction. 


  • Critical Cross-field Outcomes (CCFO): 

    UNIT STANDARD CCFO IDENTIFYING 
  • To understand the relationship between business trade and debtors as security for business finance. 

  • UNIT STANDARD CCFO COLLECTING 
  • To collect, organise and critically evaluate information when the appropriate match between business need and factoring as lending is illustrated. 

  • UNIT STANDARD CCFO DEMONSTRATING 
  • To demonstrate an understanding of the world as a set of related systems when the approach to business analysis to determine lending required is explained with reference to examples. 

  • REREGISTRATION HISTORY 
    As per the SAQA Board decision/s at that time, this unit standard was Reregistered in 2012; 2015. 

    UNIT STANDARD NOTES 
    Legal Requirements

    All procedures must meet recognised codes of practice as well as obligations required by current legislation within South Africa and within the normal parameters of the defined job/task.

    Terminology
  • Security - this is a term used to refer to other assets that can be attached in order to provide secondary recourse in the event of a loss incurred by the lender.
  • Full factoring - this term refers to a service where the entire suppliers debtors book is administrated by the factoring house.
  • Invoice discounting - this terms refers to lending based on discounting a selected number of invoices. 

  • QUALIFICATIONS UTILISING THIS UNIT STANDARD: 
      ID QUALIFICATION TITLE PRE-2009 NQF LEVEL NQF LEVEL STATUS END DATE PRIMARY OR DELEGATED QA FUNCTIONARY
    Elective  20185   Further Education and Training Certificate: Banking  Level 4  NQF Level 04  Reregistered  2023-06-30  BANKSETA 


    PROVIDERS CURRENTLY ACCREDITED TO OFFER THIS UNIT STANDARD: 
    This information shows the current accreditations (i.e. those not past their accreditation end dates), and is the most complete record available to SAQA as of today. Some Primary or Delegated Quality Assurance Functionaries have a lag in their recording systems for provider accreditation, in turn leading to a lag in notifying SAQA of all the providers that they have accredited to offer qualifications and unit standards, as well as any extensions to accreditation end dates. The relevant Primary or Delegated Quality Assurance Functionary should be notified if a record appears to be missing from here.
     
    1. Absa Learning & Development 
    2. Bidvest Bank 
    3. Chartall Business College 
    4. Cornerstone Performance Solutions (Pty) Ltd 
    5. Felix Risk Training Consultants 
    6. Firstrand Bank - Benmore 
    7. Nedbank Ltd 
    8. The Facilitation Workshop 



    All qualifications and part qualifications registered on the National Qualifications Framework are public property. Thus the only payment that can be made for them is for service and reproduction. It is illegal to sell this material for profit. If the material is reproduced or quoted, the South African Qualifications Authority (SAQA) should be acknowledged as the source.