Factoring Agreement Document With Recourse In Travis

State:
Multi-State
County:
Travis
Control #:
US-00037DR
Format:
Word; 
Rich Text
Instant download

Description

The Factoring Agreement Document with Recourse in Travis is a structured legal instrument that facilitates the sale of accounts receivable from a seller (Client) to a factor, who provides immediate cash flow in exchange. This agreement stipulates that the factor assumes the credit risk of certain accounts while retaining recourse rights if specific conditions, such as credit limit breaches, occur. Key aspects of the agreement include the assignment of accounts receivable, sales and delivery requirements, credit approval process, and the provisions regarding payment and commissions. The form includes guidelines for proper completion, emphasizing the importance of clear and accurate record-keeping, and the necessity of including all relevant invoice documentation. Users are instructed to ensure adherence to credit limits set by the factor and timely reporting of customer disputes or returns. This document is crucial for attorneys, partners, and legal assistants in corporate financial settings, as it outlines the legal parameters of factoring relationships and protects the interests of all parties involved.
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FAQ

There are two types of debts: recourse and nonrecourse. A recourse debt holds the borrower personally liable. All other debt is considered nonrecourse. In general, recourse debt (loans) allows lenders to collect what is owed for the debt even after they've taken collateral (home, credit cards).

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).

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Factoring Agreement Document With Recourse In Travis