The separate distinction of an entity in thought is not a metaphysical assertion, but a method of procedure necessary for the finite expression of individual propositions.

Apart from entities there could be no finite truths; they are the means by which the infinitude of irrelevance is kept out of thought.
To sum up: the termini for thought are entities, primarily with bare individuality, secondarily with properties and relations ascribed to them in the procedure of thought; the termini for sense-awareness are factors in the fact of nature, primarily relata and only secondarily discriminated as distinct individualities.
No characteristic of nature which is immediately posited for knowledge by sense-awareness can be explained.

It is impenetrable by thought, in the sense that its peculiar essential character which enters into experience by sense-awareness is for thought merely the guardian of its individuality as a bare entity.

Thus for thought 'red' is merely a definite entity, though for awareness 'red' has the content of its individuality.

The transition from the 'red' of awareness to the 'red' of thought is accompanied by a definite loss of content, namely by the transition from the factor 'red' to the entity 'red.' This loss in the transition to thought is compensated by the fact that thought is communicable whereas sense-awareness is incommunicable.
Thus there are three components in our knowledge of nature, namely, fact, factors, and entities.