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The Accounts Receivable Financing Agreement serves as the primary document governing the sale or financing of accounts receivable in the United States. This agreement is particularly valuable for businesses seeking to improve cash flow without traditional bank loans. It establishes the legal framework for either factoring (sale of receivables) or asset-based lending (using receivables as collateral), depending on the structure. The document must comply with UCC Article 9, federal lending regulations, and state-specific requirements. It typically includes detailed provisions for eligibility criteria, purchase price calculations, representations and warranties, and operational procedures for ongoing financing.

1. Parties: Identification of the financing party (Factor) and the company selling receivables (Seller)

2. Background: Context of the financing arrangement and business purpose, including the Seller's desire to finance its receivables and the Factor's willingness to purchase them

3. Definitions: Key terms including Eligible Receivables, Advance Rate, Collection Period, Purchase Price, and other technical terms used throughout the agreement

4. Purchase and Sale of Receivables: Core transaction terms and mechanics of how receivables will be purchased and assigned

5. Eligibility Criteria: Detailed requirements for receivables to qualify for financing, including age, quality, and debtor requirements

6. Purchase Price and Payment Terms: Pricing methodology, advance rates, fees, and payment mechanics including settlement procedures

7. Representations and Warranties: Standard assurances about business, authority, receivables quality, and compliance with laws

8. Covenants: Ongoing obligations of the seller including reporting, notice requirements, and operational commitments

9. Events of Default: Circumstances constituting default and corresponding remedies available to the Factor

10. Term and Termination: Duration of the agreement, renewal provisions, and termination rights

11. Miscellaneous: Standard boilerplate provisions including notices, amendments, governing law, and jurisdiction