Factoring And Security Agreement Template for England and Wales

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Key Requirements PROMPT example:

Factoring And Security Agreement

"Need a Factoring and Security Agreement for my manufacturing company to factor Ã‚Â£2 million in receivables, with recourse to the factor and a 75% advance rate, to be completed by March 2025."

What is a Factoring And Security Agreement?

A Factoring And Security Agreement is essential when a business wishes to monetize its accounts receivable through a factoring arrangement while providing security to the factor. This document, governed by English and Welsh law, sets out the terms for the purchase of receivables, establishes the factor's security interests, and includes provisions for notifications to debtors, collection procedures, and ongoing operational requirements. It's particularly relevant in situations where businesses need to improve cash flow while ensuring the factor has adequate protection through security arrangements. The agreement must comply with English law requirements regarding assignment of receivables, registration of charges, and financial services regulations.

What sections should be included in a Factoring And Security Agreement?

1. Parties: Identification and details of the factor and the client

2. Background: Context of the agreement and commercial purpose

3. Definitions and Interpretation: Key terms and their meanings used throughout the agreement

4. Sale and Purchase of Receivables: Core provisions regarding the transfer of receivables

5. Purchase Price and Payment Terms: Pricing mechanism and payment arrangements

6. Security Provisions: Details of security granted and enforcement rights

7. Representations and Warranties: Standard assurances from both parties

8. Covenants: Ongoing obligations of the parties

9. Events of Default: Circumstances constituting default and consequences

10. Termination: Provisions for ending the agreement

What sections are optional to include in a Factoring And Security Agreement?

1. Cross-Border Provisions: Additional provisions for handling international receivables and cross-border factoring arrangements

2. Data Protection: Specific provisions for handling personal data in compliance with UK GDPR and Data Protection Act 2018

3. Insurance: Provisions relating to credit insurance arrangements and requirements

4. Collection Procedures: Detailed provisions regarding the collection process when factor handles collections directly

What schedules should be included in a Factoring And Security Agreement?

1. Form of Notice to Debtors: Template notification to debtors about the factoring arrangement

2. Eligible Receivables Criteria: Detailed criteria for acceptable receivables

3. Calculation of Purchase Price: Detailed pricing formula and mechanisms

4. Operating Procedures: Day-to-day operational procedures and requirements

5. Form of Debtor Schedule: Template for listing and describing receivables

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

alex.den.21@genieai.co

Relevant legal definitions

Clauses

Relevant Industries

Technology
Financial Services
Professional Services
Manufacturing
Healthcare

Relevant Teams

Human Resources
Legal
Administration
Operations
Management

Relevant Roles

Human Resources Director
HR Manager
Department Head
Managing Director
Operations Manager

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What is a Factoring And Security Agreement?

What sections should be included in a Factoring And Security Agreement?

What sections are optional to include in a Factoring And Security Agreement?

What schedules should be included in a Factoring And Security Agreement?

Authors

Alex Denne

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