The Tennessee General Form of Factoring Agreement — Assignment of Accounts Receivable is a legal document that outlines the terms and conditions between the factoring company and the business owner for the purchase and assignment of accounts receivable. This agreement enables businesses to obtain immediate cash flow by selling their outstanding invoices at a discounted rate to a third-party factoring company. In Tennessee, there might be different variations of the General Form of Factoring Agreement — Assignment of Accounts Receivable based on specific requirements or conditions. Some potential types could include: 1. Recourse Factoring Agreement: This type of agreement places the ultimate responsibility for collection on the business owner, even after selling the accounts receivable to the factoring company. 2. Non-Recourse Factoring Agreement: In this arrangement, the factoring company assumes the risk of non-payment by the customers. If the customer fails to pay the invoice, the factoring company absorbs the loss, relieving the business owner of any liability. 3. Full-Service Factoring Agreement: This comprehensive agreement offers a range of services beyond just funding, such as credit checks on customers, collection services, and invoice management. 4. Notification Factoring Agreement: With this type of agreement, the factoring company notifies the customers of the assignment of the accounts receivable. The customer is instructed to redirect payments directly to the factoring company, ensuring a seamless transition. 5. Maturity Factoring Agreement: This agreement allows the factoring company to advance only a portion of the invoice value initially, with the remainder paid upon the maturity date of the invoice. This arrangement is suitable for businesses that have established relationships with their customers and can wait for full payment. 6. Invoice Discounting Agreement: Similar to factoring, this agreement involves the sale of accounts receivable to a financing company. However, unlike factoring, invoice discounting allows the business owner to retain the responsibility for collection and customer relationships. The Tennessee General Form of Factoring Agreement — Assignment of Accounts Receivable protects the interests of both the factoring company and the business owner by clearly defining the rights, obligations, and responsibilities of each party. It covers essential aspects such as the purchase price of the accounts receivable, fee structure, recourse provisions, payment terms, and any limitations or exclusions. Businesses seeking immediate working capital can leverage this agreement to enhance their cash flow while transferring the collection burden to a specialized financial institution.