This form is a type of asset-financing arrangement in which a company uses its receivables (money owed by customers) as collateral in a financing agreement. The company receives an amount that is equal to a reduced value of the receivables pledged. The age of the receivables have a large effect on the amount a company will receive. The older the receivables, the less the company can expect.
This type of financing helps companies free up capital that is stuck in accounts receivables. Accounts receivable financing transfers the default risk associated with the accounts receivables to the financing company. This transfer of risk can help the company using the financing to shift focus from trying to collect receivables to current business activities.
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.
Arizona Financing Agreement between Dealer and Credit Corporation for Wholesale Financing with Security interest in Accounts and General Intangibles is a legally binding contract that outlines the terms and conditions associated with providing wholesale financing to dealers by credit corporations in Arizona. This agreement ensures transparency and protects the interests of both parties involved. The financing agreement serves as a vital tool for facilitating the relationship between dealers and credit corporations. It enables dealers to obtain the necessary funds to purchase inventory at a wholesale level, allowing them to meet customer demands and expand their businesses. At the same time, credit corporations are able to provide dealers with the financial support they need while protecting their interests through the establishment of a security interest in accounts and general intangibles. The terms outlined in the Arizona Financing Agreement vary depending on the specific needs and requirements of the parties involved. Different types of financing agreements may include: 1. Floor Plan Financing Agreement: This type of agreement is commonly used in the automotive industry, where car dealers secure funding to purchase vehicles for their showroom or lot. The credit corporation provides the necessary funds, and the dealer uses the vehicles as collateral until they are sold to customers. 2. Equipment Financing Agreement: In this type of agreement, the credit corporation provides financing to dealers for the purchase of equipment, machinery, or other assets necessary for their business operations. The equipment serves as collateral until the dealer repays the loan. 3. Inventory Financing Agreement: This agreement focuses primarily on financing the dealer's inventory, enabling them to stock up on goods or merchandise for resale. The credit corporation extends the necessary funds, and the dealer pledges the inventory as collateral until the loan is repaid. Regardless of the specific type of financing agreement, the Arizona Financing Agreement between Dealer and Credit Corporation for Wholesale Financing with Security interest in Accounts and General Intangibles typically includes key provisions such as: — Identification of the parties involved, including their legal names and contact information. — Specific details regarding the type and amount of financing being provided. — Terms and conditions for repayment, including interest rates, payment schedules, and any applicable fees or penalties for default. — Establishment of a security interest in the dealer's accounts and general intangibles, ensuring the credit corporation's rights and priority in case of default or bankruptcy. — Clauses outlining the rights and obligations of both parties, including restrictions on the dealer's ability to transfer or encumber the financed assets. — Dispute resolution mechanisms, such as arbitration or mediation, to address any disagreements that may arise during the term of the agreement. — Governing law provisions, specifying that the agreement shall be governed by and interpreted in accordance with the laws of the state of Arizona. It is crucial for both parties to thoroughly review and understand the terms of the financing agreement before signing it. Seeking legal counsel can provide additional guidance and ensure compliance with applicable laws and regulations.
