Nebraska General Form of Factoring Agreement - Assignment of Accounts Receivable

• Category: Contracts - Factoring
• State: Multi-State
• Control #: US-0270BG
• Format: Word; Rich Text

Description

This form is a factoring agreement for the assignment of accounts receivable. Factoring is a financial transaction in which a firm sells its accounts receivable invoices to a third party called a factoring firm at a discount, so that it receives immediate money to continue its business. The factoring firm pays a percentage of the invoices immediately. Firms often factor receivables to improve their cash flow. The Nebraska General Form of Factoring Agreement — Assignment of Accounts Receivable is a legally-binding contract entered into by a company involved in factoring arrangements. Factoring refers to the process of selling accounts receivable (unpaid invoices) to a third-party financial institution known as a factor, in exchange for immediate cash flow. This form is specific to businesses operating in the state of Nebraska. The General Form of Factoring Agreement is a comprehensive and flexible document that includes various clauses and provisions, designed to protect the rights and obligations of all parties involved in the factoring process. It covers essential aspects of the agreement, ensuring a clear understanding between the factor and the company seeking financing. Some key clauses commonly found in the Nebraska General Form of Factoring Agreement include: 1. Assignment of Accounts Receivable: This clause outlines the company's agreement to assign its accounts receivable to the factor for a specified period. It details the scope of the assignment, including the specific accounts, invoices, and debts involved. 2. Purchase Price and Fees: This section states the purchase price at which the factor will buy the accounts receivable, typically calculated as a percentage of their face value. It also covers any additional fees, such as discount fees or handling charges. 3. Representations and Warranties: Here, the company provides assurances to the factor, affirming that the assigned accounts are valid, accurate, and free from any liens or encumbrances, ensuring the factor's legal rights over the assets. 4. Recourse and Non-Recourse: This clause defines the nature of the factoring agreement, determining whether the company retains recourse (liability) for the payment of assigned accounts if the debtor defaults. Non-recourse factoring relieves the company from this responsibility, whereas recourse factoring holds the company liable. 5. Notice of Assignment: This section requires the company to notify all customers with assigned accounts about the factoring arrangement, ensuring proper payment direction and account management. 6. Term and Termination: The length of the agreement is specified here, along with conditions under which either party may terminate the agreement, such as breach of contract. While the Nebraska General Form of Factoring Agreement takes into account the basic structure for most factoring transactions, there may be specific variations or addendums tailored to certain industries or unique business requirements. These may include: 1. Construction Factoring Agreement: This type of factoring agreement is specific to construction companies, addressing industry-specific challenges such as retain age (the withholding of a portion of payment until a project is completed) and progress billing. 2. Medical Factoring Agreement: Designed for healthcare providers, this agreement may include provisions related to the assignment of medical receivables, HIPAA compliance, and other medical billing considerations. It is crucial for businesses entering into any factoring agreement to consult with legal professionals familiar with Nebraska laws to ensure compliance and protection of their rights and interests.

The Nebraska General Form of Factoring Agreement — Assignment of Accounts Receivable is a legally-binding contract entered into by a company involved in factoring arrangements. Factoring refers to the process of selling accounts receivable (unpaid invoices) to a third-party financial institution known as a factor, in exchange for immediate cash flow. This form is specific to businesses operating in the state of Nebraska. The General Form of Factoring Agreement is a comprehensive and flexible document that includes various clauses and provisions, designed to protect the rights and obligations of all parties involved in the factoring process. It covers essential aspects of the agreement, ensuring a clear understanding between the factor and the company seeking financing. Some key clauses commonly found in the Nebraska General Form of Factoring Agreement include: 1. Assignment of Accounts Receivable: This clause outlines the company's agreement to assign its accounts receivable to the factor for a specified period. It details the scope of the assignment, including the specific accounts, invoices, and debts involved. 2. Purchase Price and Fees: This section states the purchase price at which the factor will buy the accounts receivable, typically calculated as a percentage of their face value. It also covers any additional fees, such as discount fees or handling charges. 3. Representations and Warranties: Here, the company provides assurances to the factor, affirming that the assigned accounts are valid, accurate, and free from any liens or encumbrances, ensuring the factor's legal rights over the assets. 4. Recourse and Non-Recourse: This clause defines the nature of the factoring agreement, determining whether the company retains recourse (liability) for the payment of assigned accounts if the debtor defaults. Non-recourse factoring relieves the company from this responsibility, whereas recourse factoring holds the company liable. 5. Notice of Assignment: This section requires the company to notify all customers with assigned accounts about the factoring arrangement, ensuring proper payment direction and account management. 6. Term and Termination: The length of the agreement is specified here, along with conditions under which either party may terminate the agreement, such as breach of contract. While the Nebraska General Form of Factoring Agreement takes into account the basic structure for most factoring transactions, there may be specific variations or addendums tailored to certain industries or unique business requirements. These may include: 1. Construction Factoring Agreement: This type of factoring agreement is specific to construction companies, addressing industry-specific challenges such as retain age (the withholding of a portion of payment until a project is completed) and progress billing. 2. Medical Factoring Agreement: Designed for healthcare providers, this agreement may include provisions related to the assignment of medical receivables, HIPAA compliance, and other medical billing considerations. It is crucial for businesses entering into any factoring agreement to consult with legal professionals familiar with Nebraska laws to ensure compliance and protection of their rights and interests.