Accounts Receivable Purchase Agreement Template for Switzerland

An Accounts Receivable Purchase Agreement is a financial contract that allows you to sell your outstanding invoices and receivables to a factoring company or financial institution for immediate cash. Under Swiss law, this arrangement provides an effective solution for improving working capital while potentially transferring collection risks to the purchasing entity.

When do you need this document?

You need this agreement when your business faces cash flow challenges due to extended payment terms from customers, or when you want to reduce credit risk exposure. Manufacturing companies often use these agreements to fund inventory purchases while waiting for customer payments. Service businesses with large corporate clients frequently rely on receivables purchase to maintain steady cash flow during project delivery phases. Exporters particularly benefit from this arrangement when dealing with international customers who require extended payment periods, as it provides immediate access to funds while transferring foreign exchange and credit risks.

Key legal considerations

The agreement must clearly define which receivables are eligible for purchase, typically excluding disputed invoices, receivables from related parties, or those subject to existing security interests. Purchase price calculations require precise formulas, often involving advance rates and reserve accounts to protect the purchaser. You must address notification requirements to debtors, as Swiss law permits both disclosed and undisclosed factoring arrangements. Risk allocation clauses are crucial, determining whether the arrangement constitutes recourse or non-recourse factoring. The agreement should include detailed operational procedures for ongoing receivables purchases, including delivery requirements, verification processes, and collection procedures. Termination provisions must address the treatment of outstanding receivables and any ongoing obligations between parties.

Legal requirements in Switzerland

Swiss law requires compliance with the Swiss Code of Obligations, particularly Articles 164-174 governing assignment of claims and receivables. The assignment becomes effective against the debtor only upon notification, unless the debtor consents to the assignment. For financial institutions engaging in factoring activities, compliance with the Federal Act on Banks and Savings Banks may be required if the activities constitute banking transactions. The Federal Act on Financial Services (FinSA) and Federal Act on Financial Institutions (FinIA) may apply depending on the nature and scale of the factoring arrangement. You must ensure proper documentation to perfect the assignment under Swiss law, including maintaining adequate records of assigned receivables. The agreement should address Swiss data protection requirements when handling customer information during the collection process. Additionally, if the arrangement involves cross-border elements, you may need to consider Swiss international private law rules and potential tax implications for both domestic and international transactions.