The Debt Factoring Agreement is a crucial financial instrument used when businesses seek to improve their working capital position by selling their accounts receivable to a specialized financial institution. This agreement, governed by Swiss law, provides a comprehensive framework for the factoring relationship, detailing everything from the assignment mechanism to operational procedures. It is particularly valuable for businesses requiring immediate cash flow, while offering factors a secure method of financing. The document addresses key aspects including purchase price calculations, eligibility criteria for receivables, collection procedures, and risk allocation. Swiss law provides a robust legal framework for such arrangements, particularly through the Code of Obligations and financial market regulations, making this agreement suitable for both domestic and cross-border factoring transactions.
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1. Parties: Identification of the Factor and the Client (Supplier), including full legal names, registration details, and addresses
2. Background: Context of the agreement, brief description of the parties' businesses, and purpose of the factoring arrangement
3. Definitions and Interpretation: Definitions of key terms used throughout the agreement and rules of interpretation
4. Assignment of Receivables: Core provisions regarding the assignment of receivables, including mechanism and timing of assignments
5. Purchase Price and Payment Terms: Calculation of purchase price, advance rate, reserves, and payment mechanisms
6. Eligibility Criteria: Criteria for receivables to qualify for factoring, including any exclusions
7. Representations and Warranties: Representations and warranties from the Client regarding their business and the receivables
8. Client Undertakings: Ongoing obligations of the Client including operational, financial, and reporting requirements
9. Collection and Servicing: Procedures for collection of receivables and servicing arrangements
10. Fees and Charges: All fees payable to the Factor including factoring fees, administration fees and other charges
11. Events of Default: Circumstances constituting default and consequences thereof
12. Termination: Terms and procedures for termination of the agreement
13. Confidentiality: Obligations regarding confidential information
14. Notices: Process and requirements for formal communications between parties
15. Governing Law and Jurisdiction: Specification of Swiss law as governing law and jurisdiction for disputes
1. Security: Additional security arrangements such as guarantees or pledges - include when additional security is required
2. Insurance: Specific insurance requirements - include when credit insurance is part of the arrangement
3. Electronic Platform: Terms for use of electronic platform or software - include when specific technology is used for factoring operations
4. International Provisions: Specific provisions for cross-border factoring - include for international arrangements
5. Recourse Provisions: Detailed recourse mechanisms - include for recourse factoring arrangements
6. Data Protection: Specific data protection provisions - include when processing personal data
7. Anti-Money Laundering: Specific AML requirements - include for high-risk sectors or when required by regulations
1. Schedule 1 - Eligibility Criteria: Detailed list of criteria for eligible receivables
2. Schedule 2 - Fee Schedule: Detailed breakdown of all fees, charges, and calculation methods
3. Schedule 3 - Operational Procedures: Detailed procedures for daily operations, submissions, and communications
4. Schedule 4 - Form of Assignment Notice: Template for assignment notices to be used
5. Schedule 5 - Reporting Requirements: Templates and requirements for regular reporting
6. Schedule 6 - Excluded Debtors: List of debtors excluded from the factoring arrangement
7. Appendix A - Power of Attorney: Form of power of attorney for collection purposes
8. Appendix B - Notice to Debtors: Template for notifications to debtors about the assignment
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