This is another word for invoice or what is owed to your company for product or services rendered. This is generally paid on predetermined terms.
This is the percentage of the face value of the invoice. This typically is determined by the industry. Other contributing variables are dilution, and additional services outside of the scope of defined or agreed upon work. Sales taxes are typically not advanced against.
The money owed is shifted from the Account Debtor back to the Accounts Receivables Finance Client. The typical causes are the invoice has hit the pre-determined recourse date set up in the contract, or because there has been some form of dispute that needs to be resolved between the customer/client relationship rather than the finance company.
This is the main security for the Receivables Finance Company. While it can take many forms it is typically the invoices or the invoices and the unencumbered assets of the company. Example a home loan is secured by the property the loan is against.
Notice of Assignment
This is a letter sent to your customers’ accounts payable departments to notify them of the sale of your invoices as well as the change in address to mail payments. This notice is terminated once the contract between you and your factoring company is terminated and all financial obligations are fulfilled.