Factoring Agreement Meaning With Example In New York

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

Description

A factoring agreement is a legal document that outlines the arrangement between a factor (a financial entity) and a seller (a business) for the purchase of accounts receivable at a discount. In New York, this agreement allows the seller to receive immediate funds by selling their unpaid invoices, helping with cash flow management. It includes key features such as assignment of receivables, credit approval processes, and terms regarding the purchase price and costs associated with the transaction. The document instructs users to adhere to specific forms of communication with customers and provides for the rights and responsibilities of both parties. Effective filling and editing need attention to detail, specifically in areas like credit limits and commissions, which must be determined before signing. Attorneys, partners, owners, associates, paralegals, and legal assistants can use this form to facilitate financial transactions, mitigate risks associated with customer insolvency, and maintain clear records of accounts. This agreement is particularly useful for businesses seeking to enhance their liquidity while minimizing the burden of credit management.