Receivables purchase agreement Definition

GLOSSARY

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What does Receivables purchase agreement mean?

An agreement pursuant to which the financing of receivables is structured as a sale and purchase of the receivables.

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Invoice discounting and factoring

The popularity of financing business through invoice discounting and factoring of receivables has grown significantly in the UK over the last 25 years.Invoice discounting and factoring are types of receivables financing whereby a company, sole trader or partnership, known as the client, sells (ie assigns) its book debts (or receivables) together with all related rights, to an invoice discounter or factor (each a receivables purchaser) at a discounted rate. The advantage to the client is that it enjoys a more predictable and liquid cash-flow cycle.This Practice Note:•explains the basic difference between invoice discounting and factoring•illustrates the invoice discounting and factoring process•highlights the challenges that can arise in relation to the purchase of a receivable, and•provides a brief overview of the UK-based trade association for asset based financing (including receivables finance)Distinguishing between invoice discounting and factoringBoth invoice discounting and factoring facilities involve the purchase of receivables from a client by the receivables purchaser at a discounted rate.The principal difference between the products is whether the sales ledger administration and collection functions...

Key concepts and terminology in receivables finance and asset-based lending

Key concepts and terminology in receivables finance and asset-based lending This Practice Note explains the key concepts and terminology used in receivables finance and asset-based lending. It covers: • the terminology surrounding the key parties in receivables finance and asset-based lending • the types of facility and documentation used in receivables finance and asset-based lending transactions • the key terminology in receivables finance and asset-based lending • the key legal concepts in receivables finance and asset-based lending being assignment, fixed and floating charges, retention of title and cross border issues, and • the key cases which are relevant to taking security over receivables Parties—terminology In the UK, a receivables facility is typically structured as a receivables purchase facility which can either take the form of an invoice discounting facility or a factoring facility (see Practice Note: Invoice discounting and factoring). It is also possible to provide a loan secured against the value of receivables but this is much less common in the UK. There are fundamental differences...

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Moveable Transactions (Scotland) Bill—Assignation of Claims

Restructuring & Insolvency analysis: This is one of a series of articles we at Morton Fraser are producing to guide finance companies through the wholesale change proposed in Scots law in relation to security over goods, intellectual property and shares, on the one hand, and invoice finance or the purchase of receivables, on the other. The Moveable Transactions (Scotland) Bill (the Bill) is slated to move through the Scottish Parliament this session, so, while detail may change during that passage and statutory instruments will be required before it can become effective law, it is now timely to start preparing for the new regime. This News Analysis by Bev Wood at Morton Fraser LLP considers the new process for assigning debts, referred to in the Bill as ‘Assignation of Claims’.

An invitation to challenge Linden Gardens? (First Abu Dhabi Bank v BP Oil)

Banking & Finance analysis: This case considers the effect of a prohibition on the assignment of a contract right as between the assignor and purported assignee and the possibility that a long standing authority of the House of Lords which held an assignment made in breach of a no assignment clause was of no effect as between assignor and assignee might now be ripe for overturning.

Read the latest 2 News articles on Receivables purchase agreement

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