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.
A New Hampshire Factoring Agreement is a financial arrangement between a company (the "client") and a finance company (the "factor") that allows the client to access immediate cash flow by selling its accounts receivable to the factor at a discounted rate. This type of agreement, also known as invoice factoring or accounts receivable financing, is commonly used by businesses in New Hampshire to improve their cash flow and resolve any immediate cash challenges. The New Hampshire Factoring Agreement involves the client submitting its invoices to the factor, who then advances a certain percentage of the invoice value (usually around 70-90%) to the client. The factor manages the collection process of the invoices directly from the clients' customers and deducts their fees from the remaining balance. Once the factor receives full payment from the clients' customers, they remit the balance to the client, minus their fees. There are several types of New Hampshire Factoring Agreements available, depending on the specific needs and circumstances of the client. These types include recourse factoring and non-recourse factoring. Recourse factoring means that the client is responsible for reimbursing the factor if their customers fail to pay the outstanding invoices, while non-recourse factoring absolves the client of any liability if the customers default. It is crucial for businesses to thoroughly understand their obligations and protections under each type of factoring agreement to make an informed decision. Furthermore, New Hampshire Factoring Agreements may also vary in terms of the contract length, the size of the invoices eligible for factoring, and the fees charged by the factor. Some agreements may require a long-term commitment, while others offer more flexibility with shorter-term arrangements. Overall, a New Hampshire Factoring Agreement provides businesses with a valuable financial solution to bridge the gap between their accounts receivable and accounts payable. By converting unpaid invoices into immediate cash, companies can improve their working capital, meet operational expenses, invest in growth opportunities, and maintain a stable cash flow throughout their operations.
