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 Wake North Carolina Factoring Agreement is a financial arrangement between a business (known as the client or the seller) and a financial institution (known as the factor or the buyer) where the factor purchases the accounts receivable of the client at a discounted rate in exchange for immediate cash flow. This enables businesses to obtain immediate working capital by selling their invoices or accounts receivable to a factor, allowing them to meet their financial obligations, invest in growth opportunities, or cover other expenses. Keywords: Wake North Carolina, Factoring Agreement, financial arrangement, business, client, seller, financial institution, factor, buyer, accounts receivable, discounted rate, immediate cash flow, working capital, invoices, financial obligations, growth opportunities, expenses. There are different types of Wake North Carolina Factoring Agreements, including: 1. Recourse Factoring Agreement: In this type of agreement, the client remains responsible for any unpaid invoices or bad debt if the debtor fails to pay. The factor provides cash advances based on the accounts receivable, but the risk of non-payment still lies with the client. 2. Non-Recourse Factoring Agreement: This agreement transfers the risk of non-payment to the factor. If the debtor fails to pay, the factor absorbs the loss, and the client is not held liable. However, this type of agreement often comes with higher fees and stricter qualification criteria. 3. Spot Factoring Agreement: This agreement allows the client to select specific invoices or accounts receivable to be sold to the factor on a one-time basis. It provides flexibility for businesses that may not require constant factoring but need occasional immediate cash flow. 4. Full-Service Factoring Agreement: This comprehensive agreement includes not only the purchase of accounts receivable but also various additional services, such as credit checks on debtors, collection management, and invoice processing. It offers a holistic solution to businesses in managing their accounts receivable and cash flow effectively. 5. Construction Factoring Agreement: Specifically designed for construction companies, this agreement focuses on factoring invoices related to construction projects. It provides immediate cash flow to cover expenses like labor, material costs, and subcontractor payments, enabling construction companies to manage their cash flow more efficiently. Keywords: Recourse Factoring Agreement, Non-Recourse Factoring Agreement, Spot Factoring Agreement, Full-Service Factoring Agreement, Construction Factoring Agreement, invoices, accounts receivable, cash advances, risk, debtor, bad debt, fees, qualification criteria, one-time basis, flexibility, full-service, credit checks, collection management, invoice processing, construction companies, labor, material costs, subcontractor payments, cash flow.A Wake North Carolina Factoring Agreement is a financial arrangement between a business (known as the client or the seller) and a financial institution (known as the factor or the buyer) where the factor purchases the accounts receivable of the client at a discounted rate in exchange for immediate cash flow. This enables businesses to obtain immediate working capital by selling their invoices or accounts receivable to a factor, allowing them to meet their financial obligations, invest in growth opportunities, or cover other expenses. Keywords: Wake North Carolina, Factoring Agreement, financial arrangement, business, client, seller, financial institution, factor, buyer, accounts receivable, discounted rate, immediate cash flow, working capital, invoices, financial obligations, growth opportunities, expenses. There are different types of Wake North Carolina Factoring Agreements, including: 1. Recourse Factoring Agreement: In this type of agreement, the client remains responsible for any unpaid invoices or bad debt if the debtor fails to pay. The factor provides cash advances based on the accounts receivable, but the risk of non-payment still lies with the client. 2. Non-Recourse Factoring Agreement: This agreement transfers the risk of non-payment to the factor. If the debtor fails to pay, the factor absorbs the loss, and the client is not held liable. However, this type of agreement often comes with higher fees and stricter qualification criteria. 3. Spot Factoring Agreement: This agreement allows the client to select specific invoices or accounts receivable to be sold to the factor on a one-time basis. It provides flexibility for businesses that may not require constant factoring but need occasional immediate cash flow. 4. Full-Service Factoring Agreement: This comprehensive agreement includes not only the purchase of accounts receivable but also various additional services, such as credit checks on debtors, collection management, and invoice processing. It offers a holistic solution to businesses in managing their accounts receivable and cash flow effectively. 5. Construction Factoring Agreement: Specifically designed for construction companies, this agreement focuses on factoring invoices related to construction projects. It provides immediate cash flow to cover expenses like labor, material costs, and subcontractor payments, enabling construction companies to manage their cash flow more efficiently. Keywords: Recourse Factoring Agreement, Non-Recourse Factoring Agreement, Spot Factoring Agreement, Full-Service Factoring Agreement, Construction Factoring Agreement, invoices, accounts receivable, cash advances, risk, debtor, bad debt, fees, qualification criteria, one-time basis, flexibility, full-service, credit checks, collection management, invoice processing, construction companies, labor, material costs, subcontractor payments, cash flow.
