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Factoring Agreement With Recourse

Factoring Agreement With Recourse Template for Malaysia

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Key Requirements PROMPT example:

Factoring Agreement With Recourse

"I need a Factoring Agreement With Recourse for my manufacturing company in Malaysia, with an 80% advance rate and facility limit of RM 5 million, to be effective from March 1, 2025."

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Document background
This Factoring Agreement With Recourse is designed for use in Malaysia when a business seeks to improve its working capital position by selling its accounts receivable to a financial institution while retaining ultimate responsibility for payment. The agreement complies with Malaysian financial regulations and commercial law, including the Financial Services Act 2013 and relevant Bank Negara Malaysia directives. It contains comprehensive provisions covering the purchase price calculation, advance rate, collection procedures, representations and warranties, security arrangements, and the mechanism for exercising recourse rights. The document is structured to protect both the Factor's interests in securing repayment and the Client's need for efficient working capital management.
Suggested Sections

1. Parties: Identification of the Factor and the Client (Seller)

2. Background: Context of the factoring arrangement and purpose of the agreement

3. Definitions and Interpretation: Definitions of key terms and interpretation rules

4. Factoring Facility: Details of the factoring facility, including advance rate and limits

5. Purchase of Receivables: Process and terms for selling and purchasing receivables

6. Recourse Rights: Terms under which the Factor can exercise recourse against the Client

7. Representations and Warranties: Client's representations regarding business and receivables

8. Client Obligations: Ongoing obligations of the Client including notification and reporting

9. Payment Terms: Terms for advances, fees, charges and settlement

10. Collection and Administration: Process for collecting and managing receivables

11. Events of Default: Circumstances constituting default and consequences

12. Term and Termination: Duration of agreement and termination provisions

13. General Provisions: Standard contractual clauses including notices, amendments, governing law

Optional Sections

1. Security Arrangements: Additional security requirements, used when extra security is required

2. Credit Insurance: Requirements for credit insurance, included when insurance is mandatory

3. Electronic Platform: Terms for using electronic systems, included when online platform is used

4. Dispute Resolution: Specific dispute resolution procedures, used when standard court jurisdiction is not preferred

5. Special Industry Provisions: Industry-specific terms, included based on Client's business sector

Suggested Schedules

1. Schedule 1 - Eligible Receivables Criteria: Detailed criteria for acceptable receivables

2. Schedule 2 - Fee Structure: Detailed breakdown of all fees and charges

3. Schedule 3 - Operational Procedures: Detailed procedures for submission and processing of receivables

4. Schedule 4 - Form of Notice of Assignment: Template for notifying debtors of the assignment

5. Schedule 5 - Reporting Requirements: Forms and templates for required reports

6. Appendix A - Required Documents: List of documents required for receivables verification

7. Appendix B - Power of Attorney: Format of power of attorney for collection purposes

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈË°æ | 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

Manufacturing

Trading

Distribution

Construction

Services

Retail

Wholesale

Export-Import

Logistics

Technology

Healthcare

Telecommunications

Relevant Teams

Finance

Legal

Treasury

Credit Control

Accounts Receivable

Risk Management

Operations

Compliance

Commercial

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Financial Controller

Credit Manager

Accounts Receivable Manager

Legal Counsel

Commercial Director

Business Development Manager

Risk Manager

Operations Manager

Compliance Officer

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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