Agreement Accounts Receivable Without Recourse In King

State:
Multi-State
County:
King
Control #:
US-00037DR
Format:
Word; 
Rich Text
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Description

A factor is a person who sells goods for a commission. A factor takes possession of goods of another and usually sells them in his/her own name. A factor differs from a broker in that a broker normally doesn't take possession of the goods. A factor may be a financier who lends money in return for an assignment of accounts receivable (A/R) or other security.

Many times factoring is used when a manufacturing company has a large A/R on the books that would represent the entire profits for the company for the year. That particular A/R might not get paid prior to year end from a client that has no money. That means the manufacturing company will have no profit for the year unless they can figure out a way to collect the A/R.

This form is a generic example that may be referred to when preparing such a form for your particular state. It is for illustrative purposes only. Local laws should be consulted to determine any specific requirements for such a form in a particular jurisdiction.

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FAQ

When a company factors receivables it means that they sell them to another party. If the transaction is without recourse that means the buyer takes on all the risk of credit losses. The seller of the accounts receivable does not bear any risk after the sale is complete.

In non-recourse receivables finance, the factor purchases the receivables from the seller and assumes the full debtor default risk. In a recourse transaction, the debtor default risk remains with the seller. Receivables purchased under a non-recourse agreement can generally be removed from the seller's balance sheet.

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”.

No past, present or future director, officer, employee, incorporator, manager, member, partner, stockholder, Affiliate, agent, attorney or other Representative of any party hereto or of any Affiliate of any party hereto, or any of their successors or permitted assigns, shall have any liability for any obligations or ...

An example of a without recourse note is a personal check written by A, the maker, to B, the payee. B, in turn pays off a debt to C by endorsing the check and adding the without recourse phrase.

More info

"Without recourse" means that one party cannot obtain a judgment against, or reimbursement from, a defaulting or opposing party in a financial transaction. With recourse factoring, you're responsible for the debt if your customers don't pay.First, it is important to understand what no recourse means. In effect, assignment without recourse is the same as an outright sale of the receivables. Nonrecourse factoring is a mainstream business financing solution structured to insulate businesses from loss due to bad debt. In a non-recourse arrangement, the Factor assumes the credit risk and liability of non-payment on a factored invoice. A receivables financing agreement is a type of financial transaction in which a business sells its accounts receivable (invoices) to a third party. Reserved for large groups, these contracts see one of the factors play the role of leader. IN this session, I discuss factoring of receivable with recourse and without recourse. A 'to-be-paid' list, if you will.

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Agreement Accounts Receivable Without Recourse In King