Document background
The Account Receivable Purchase Agreement is utilized when a business seeks to improve its working capital position by selling its accounts receivable to a financial institution at a discount. This arrangement, common in Australian business practice, allows companies to receive immediate cash for their receivables rather than waiting for customer payment. The agreement comprehensively covers the mechanics of the purchase, including purchase price calculations, representations about the quality of receivables, operational procedures for ongoing purchases, and compliance with Australian regulatory requirements. It's particularly relevant for businesses with significant B2B transactions or those seeking to optimize their working capital cycle. The document must comply with Australian federal laws, including the Personal Property Securities Act 2009 (Cth), and typically includes provisions for security interest registration, credit insurance (if applicable), and servicing arrangements.
