Agreement Accounts Receivable Without Recourse In Phoenix

Category:

Contracts - Factoring

State:

Multi-State

City:

Phoenix

Control #:

US-00037DR

Format:

Instant download

Description

The Agreement accounts receivable without recourse in Phoenix is designed for use in the factoring of accounts receivable transactions between a Factor and a Client. This document enables businesses to sell their outstanding invoices to a third party (the Factor) without recourse to the Client for non-payment, simplifying cash flow management. Key features include the assignment of accounts receivable, terms for credit approval, and the assumption of credit risks by the Factor. It outlines how invoices should be structured, notifications to customers, and procedures for handling merchandise returns. The form contains filling instructions, requiring parties to provide necessary identifying information and terms specific to their agreement. For attorneys, partners, and legal assistants, this Agreement serves as a reliable source to facilitate transactions that can mitigate cash flow issues for businesses while protecting their interests. Paralegals and associates can also benefit from this form by efficiently handling documentation related to factoring agreements in a professional manner.

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FAQ

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.

If an assignment of accounts receivable is without recourse, the assignee (the factor) assumes the risk of any losses on collections. If the assignee is unable to collect all of the accounts receivable, it has no recourse against the assignor.

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.

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.

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”.