Factoring Agreement Meaning With Example In Harris

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

Description

A factoring agreement refers to a financial arrangement where a business, known as the Client, sells its accounts receivable to a third party contractor, referred to as the Factor, to obtain immediate cash flow. For example, in a case involving a business in Harris, the Client could sell its invoices for products sold on credit to the Factor, enabling the Client to enhance its liquidity and support operational needs without waiting for customer payments. Key features of this agreement include the assignment of accounts receivable, credit approval requirements, and the assumption of credit risks by the Factor. Filling and editing the form requires both parties to input their names, addresses, and details about their businesses, along with the terms of the arrangement like the percentage of the factor's commission. Specific use cases for this agreement are beneficial for attorneys and legal assistants who are helping clients understand financing options, partners, and owners looking for liquidity solutions, and associates who manage business transactions. Overall, this agreement provides a structured approach to mitigate financial risks for businesses relying on credit sales, ensuring better cash flow management.