Question

What is a Factoring Agreement and why is it important for a General Contractor to know about Factoring Agreements?

Answer 1

Factoring agreement is a contract between the two parties one is a "Factor" and another is a company which ultimately goes to enter in a factoring agreement.In this agreement the "factor" takes over the right of company's asset usually Accounts receivable and paid some money generally for short term requirements. it also acts as a security for the company because now its a "factor" task to collect the due amount from the accounts receivables and it also charges certain factoring fees in lieu of that service.

and it is important for a general contractor to know about the factoring agreement because he is responsible for maintaining coordination with various vendors and parties and need to collect and receives payment on company's behalf that's why it is necessary for him to know about all the terms and conditions of factoring agreement in which company has been entered into.