Factoring Agreement With Recourse In Maricopa
Category:
State:
Multi-State
County:
Maricopa
Control #:
US-00037DR
Format:
Word;
Rich Text
Instant download
Description
The Factoring Agreement with Recourse in Maricopa outlines the terms between a Factor (lender) and a Client (seller) regarding the assignment of accounts receivable. This agreement enables the Client to receive funding based on future credit sales, while the Factor assumes the risk associated with these receivables, albeit with certain recourse provisions. Key features include the assignment of accounts, credit approval processes, assignments of rights, and the purchase price calculation, which factors in commissions and reserves. Filling and editing instructions emphasize clarity and completion accuracy, as users must ensure proper dates, names, and terms are correctly stated. The form caters to a wide range of professionals — including attorneys, partners, owners, associates, paralegals, and legal assistants — by providing a structured legal framework for businesses seeking to enhance their cash flow through factoring. It serves as a vital tool for mitigating credit risk while facilitating operational finance.
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FAQ
SALE OF RECEIVABLES: A DEFINITION In selling the Receivable without recourse the seller guarantees only the existence and validity of the receivable at the time in which the sale is made.
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).
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”.
