Factoring Agreement Meaning With Example In Cook

• Category: Contracts - Factoring
• State: Multi-State
• County: Cook
• Control #: US-00037DR
• Format: Word; Rich Text

Description

The factoring agreement is a financial contract between a factor, who purchases accounts receivable from a client, seeking immediate cash flow from its credit sales. For example, in Cook, a retailer sells goods on credit but uses a factoring agreement to receive upfront cash through the sale of its invoices. Key features of this agreement include the assignment of current and future receivables to the factor, terms for seller and buyer notification of assignments, and stipulations surrounding credit approval. The document indicates processes for addressing disputes, warranty of solvency, and necessary bookkeeping entries. This form serves various target audiences, such as attorneys, partners, and legal assistants, by providing a clear framework for cash flow management and risk mitigation. They can use it to facilitate negotiations, ensure compliance with financial regulations, and streamline the collections process, ultimately aiding businesses in maintaining liquidity and operational flexibility.