Factoring Agreement With Recourse In Broward

Category:

Contracts - Factoring

State:

Multi-State

County:

Broward

Control #:

US-00037DR

Format:

Instant download

Description

The Factoring Agreement with Recourse in Broward is a legal document established between a factor, a financing party, and a client, a seller of goods or services. This agreement enables the client to sell their accounts receivable to the factor in exchange for immediate cash flow while retaining some liability for the sold accounts, known as 'recourse.' Key features include the assignment of accounts receivable, credit approval processes, and defined responsibilities for both parties regarding sales, delivery, and potential risks of insolvency. Attorneys will find this form useful for structuring financial arrangements for clients, while partners and owners can leverage it for accessing quick liquidity. Paralegals and legal assistants will benefit by using the form to ensure compliance and proper document handling. Filling and editing instructions suggest that parties must accurately input business names, addresses, and pertinent terms, maintaining clarity in all communications. This agreement caters specifically to businesses in need of capital through accounts receivable, enhancing operational flexibility without completely relinquishing liability.

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FAQ

With recourse factoring, the business is responsible. But with non-recourse factoring, the factoring company is responsible, although there may be some stipulations based on the terms of the agreement. Higher advance rates (i.e. amount of funding you receive upfront). Lower advance rates.

How to Record Invoice Factoring Transactions With Recourse Record a credit in accounts receivable for the sold invoice in the amount of $375,000. In the recourse liability column, record a credit after estimating the bad debts and any other possible losses ($750).

The Most Common Invoice Factoring Requirements A factoring application. An accounts receivable aging report. A copy of your Articles of Incorporation. Invoices to factor. Credit-worthy clients. A business bank account. A tax ID number. A form of personal identification.

Factoring companies will typically run a background check. While less-than-perfect backgrounds can be approved for factoring, certain violent or financial crimes may be disqualifying.