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Factoring And Security Agreement

Factoring And Security Agreement Template for Belgium

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Key Requirements PROMPT example:

Factoring And Security Agreement

"I need a Factoring and Security Agreement under Belgian law for my manufacturing company, with recourse provisions and specific security over machinery and inventory, to be effective from March 2025, with a maximum facility amount of €5 million."

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Document background
A Factoring and Security Agreement is essential for businesses seeking to optimize their working capital through receivables financing while providing security to the financing party. This document, governed by Belgian law, establishes the framework for selling accounts receivable to a factor in exchange for immediate funding, while simultaneously creating security interests over specified assets. It's particularly useful for businesses with substantial accounts receivable who need regular working capital financing. The agreement incorporates Belgian financial regulations, EU directives, and international factoring practices, making it suitable for both domestic and cross-border transactions. The document details purchase mechanics, pricing structures, collection procedures, security arrangements, and risk allocation between parties, while ensuring compliance with Belgian Financial Security Law and related regulations.
Suggested Sections

1. Parties: Identification of the Factor and the Seller/Client

2. Background: Context of the agreement, nature of the Seller's business and receivables

3. Definitions and Interpretation: Detailed definitions of terms used throughout the agreement, including financial terms and calculation methodologies

4. Sale and Purchase of Receivables: Core provisions regarding the assignment and transfer of receivables, including eligibility criteria

5. Purchase Price and Payment Terms: Calculation of purchase price, advance rate, reserves, fees and charges

6. Security Interest Creation: Provisions creating security interests over relevant assets

7. Perfection and Priority: Requirements for perfecting the security interest and maintaining priority

8. Representations and Warranties: Seller's representations regarding business, receivables, and security

9. Covenants: Ongoing obligations of the Seller, including operational and financial covenants

10. Collection and Servicing: Procedures for collecting receivables and managing customer relationships

11. Events of Default: Circumstances constituting default and consequences

12. Enforcement: Rights and remedies upon default, including security enforcement

13. Miscellaneous: Standard boilerplate provisions including notices, amendments, governing law

Optional Sections

1. Recourse Provisions: Include when the factoring is with recourse, detailing the circumstances and process for recourse to the Seller

2. Cross-Border Provisions: Required when receivables involve foreign debtors or cross-border elements

3. Credit Insurance: Include when credit insurance is part of the arrangement

4. Special Collection Procedures: When specific collection procedures are required for certain debtors or industries

5. Data Protection: Detailed section required when personal data processing is significant

6. Electronic Trading Platform: Include when an electronic platform is used for receivables submission and trading

7. Undisclosed Factoring Provisions: Required for arrangements where the factoring is not disclosed to debtors

Suggested Schedules

1. Eligibility Criteria: Detailed criteria for acceptable receivables

2. Fee Schedule: Comprehensive breakdown of all fees, charges and commission

3. Operational Procedures: Detailed procedures for submission, verification and management of receivables

4. Form of Notice of Assignment: Standard form for notifying debtors of the assignment

5. Approved Debtors List: List of approved debtors and their credit limits

6. Security Documents: Forms of additional security documents required

7. Reporting Requirements: Templates and requirements for regular reporting

8. Collection Procedures: Detailed procedures for collection of receivables

9. Form of Debtor Acknowledgment: Standard form for debtor acknowledgment of assignment

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Advance Rate
Approved Debtor
Assignment
Available Funds
Business Day
Charged Assets
Collection Account
Collection Period
Commencement Date
Concentration Limit
Contract
Credit Note
Debtor
Deed of Assignment
Default Interest
Dilution
Discount Charge
Dispute
Early Payment
Eligible Receivable
Encumbrance
Event of Default
Factor's Commission
Factoring Facility
Financial Indebtedness
Financial Statements
Funding
Insolvency Event
Invoice
Material Adverse Effect
Maturity Date
Maximum Facility Amount
Notification
Notified Receivable
Outstanding Amount
Payment Period
Perfection Requirements
Purchase Price
Purchased Receivable
Receivables
Recourse
Related Rights
Reserve
Secured Obligations
Security Agent
Security Documents
Security Interest
Security Period
Seller's Account
Service Charge
Settlement Date
Termination Event
Transaction Documents
Trust Receipt
Unpaid Receivable
Working Day
Clauses
Interpretation
Definitions
Sale and Purchase
Assignment
Purchase Price
Payment Terms
Security Creation
Security Perfection
Representations and Warranties
Undertakings
Covenants
Collection Rights
Servicing Obligations
Events of Default
Enforcement
Recourse
Set-off
Interest
Fees and Expenses
Indemnification
Confidentiality
Data Protection
Anti-Money Laundering
Force Majeure
Term and Termination
Notices
Assignment and Transfer
Amendments
Severability
Entire Agreement
Governing Law
Jurisdiction
Dispute Resolution
Relevant Industries

Manufacturing

Wholesale Trade

Retail

Construction

Transportation and Logistics

Professional Services

Healthcare

Technology

Textile Industry

Automotive

Industrial Equipment

Consumer Goods

Agriculture

Food and Beverage

Relevant Teams

Legal

Finance

Treasury

Credit Control

Accounts Receivable

Risk Management

Operations

Compliance

Commercial

Business Development

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Credit Controller

Accounts Receivable Manager

Legal Counsel

Commercial Director

Risk Manager

Operations Director

Financial Controller

Credit Risk Analyst

Compliance Officer

Business Development Manager

Contract Manager

Industries
Belgian Civil Code (Code Civil/Burgerlijk Wetboek): Fundamental law governing contracts, obligations, and transfer of rights. Particularly relevant for the basic contractual framework and assignment of receivables.
Belgian Financial Security Law of 15 December 2004: Governs security interests in financial instruments and cash. Critical for the security aspects of the agreement and enforcement of security rights.
Belgian Act on Security Interests on Movable Assets (2013): Regulates the creation and enforcement of security interests on movable assets, including receivables.
Belgian Insolvency Law of 11 August 2017: Important for understanding the effects of insolvency on factoring arrangements and security interests.
EU Regulation 2015/848 on Insolvency Proceedings: Relevant for cross-border aspects of insolvency affecting factoring arrangements within the EU.
Belgian Anti-Money Laundering Law of 18 September 2017: Implements EU AML directives and must be considered for customer due diligence and transaction monitoring obligations.
EU Regulation 2016/679 (GDPR): Relevant for handling personal data in the context of factoring, especially when dealing with individual debtors or sole traders.
Belgian Economic Law Code (Code de droit économique): Contains provisions relevant to B2B and B2C relationships, including unfair contract terms and consumer protection.
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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