Factoring Agreement Document With Recourse In Hennepin
Category:
State:
Multi-State
County:
Hennepin
Control #:
US-00037DR
Format:
Word;
Rich Text
Instant download
Description
The Factoring Agreement Document with Recourse in Hennepin outlines the terms between a Factor and a Client regarding the assignment and purchasing of accounts receivable. It establishes that the Client assigns all current and future accounts receivable to the Factor, retaining certain recourse rights under specified conditions. Key features include terms of credit approval, responsibilities for merchandise sales, and provisions for credit risk assumption. The agreement requires Clients to provide documentation for receivables and allows the Factor to manage invoice communications directly with customers. Attorneys, partners, owners, associates, paralegals, and legal assistants can benefit from this document by using it to structure financial transactions that mitigate cash flow issues while maintaining legal protections. The form is adaptable for various industries reliant on credit sales, empowering businesses to secure funding against receivables with defined obligations and clear guidelines for both parties.
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FAQ
Non-recourse loans come with a unique safety net — they are secured solely by the asset being financed. In the event of default, all other assets remain protected.
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).
