Factoring Agreement General With Recourse In Bexar

Category:

Contracts - Factoring

State:

Multi-State

County:

Bexar

Control #:

US-00037DR

Format:

Instant download

Description

The Factoring Agreement General with Recourse in Bexar is a formal contract between a factor and a seller to sell accounts receivable. This contract allows the seller to receive immediate funds by selling their credit sales without full recourse, subject to certain conditions. Key features include the assignment of accounts receivable, credit approval processes, assumptions of credit risks, and provisions for the purchase price. Users must fill in specific details, such as the names of the parties, dates, and percentages related to fees. The form serves various professionals, including attorneys who may draft or review these agreements, partners and owners who need funding solutions, associates who assist in managing accounts, and legal assistants and paralegals responsible for document preparation. It highlights procedures for collecting receivables and ensures compliance with state laws applicable in Bexar. Additionally, clear instructions on financial reporting and the rights and duties of both parties ensure effective utilization of this agreement in a business context.

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FAQ

Factoring without recourse means that the risk of accounts receivable being uncollectible transfers from the buyer to the seller. Basically, if an accounts receivable cannot be collected, the seller does not have to reimburse the buyer like they would if the factoring was “with recourse”.

Two Types of Factoring There are two main types of factoring - recourse and non-recourse. Recourse factoring is the most common and means that your company must buy back any invoices that the factoring company is unable to collect payment on.

Invoice Factoring without Recourse: Once the invoices are sold to the factoring company, the selling business no longer bears any responsibility for unpaid invoices. From an accounting perspective, the selling business can treat the transaction as a sale of receivables without any ongoing liabilities or obligations.

There are two types of debts: recourse and nonrecourse. A recourse debt holds the borrower personally liable. All other debt is considered nonrecourse. In general, recourse debt (loans) allows lenders to collect what is owed for the debt even after they've taken collateral (home, credit cards).

Recourse factoring is the most common and means that your company must buy back any invoices that the factoring company is unable to collect payment on. You are ultimately responsible for any non-payment. Non-recourse factoring means the factoring company assumes most of the risk of non-payment by your customers.