Many clients ask, “Will my customers know that I am factoring?” The short answer is yes. Factoring is not completely transparent to your customers; they will know that you are financing your invoices. The factoring company will not necessarily be calling them constantly, but they will know about the relationship. The first communication between your client and the finance company happens through the Notice of Assignment document.
The Notice of Assignment (NOA)
Each company has its own version of this document, but they all generally serve the same purpose. The letter lets your clients know a few important points:
- A factoring (finance) company is managing your receivables
- The finance company has a financial right over the factored receivables
- There is a new payment address – usually a bank lock box
- Other legal matters that vary by company
From the perspective of the factoring company, this letter is very important. As you know, in an invoice factoring transaction you sell the intangible financial rights to your receivables. Since receivables are not physical goods, the Notice of Assignment allows the factoring company to notify your customers that the financial rights to the invoice have been sold to them.
Obviously, some clients have concerns about sending this letter to a customer. To ensure that this process goes seamlessly, most finance companies require you to participate actively in this process.
There is a form of financing called non-notification factoring that does not require that your clients get a notice of assignment. However, this type of factoring can only be used by larger companies that meet certain size and stability criteria.
Get more information
Are you looking for a factoring quote? We are a leading factoring company and can provide high advances at low rates. For information, please call (877) 300 3258.
Note: The Notice of Assignment document and your factoring contracts are very important documents. Have a lawyer review and explain them to you to ensure you understand them. This article is not intended as legal advice.
This is the content of the form and is provided for your convenience. It is not necessarily what the actual form looks like and does not include the information, instructions and other materials that come with the form you would purchase. An actual sample can also be viewed by clicking on the "Sample Form" near the top left of this page.
Notice of Assignment of Contract
This Packet Includes:
2. Notice of Assignment of Contract
Notice of Assignment of Contract
If a third party is involved in any of the contractual obligations or benefits of an assigned contract, that party should be notified of the assignment in writing. This alerts the third party to look to the new party for satisfaction of any obligations under the contract or to make any payments under the contract directly to the new party. Use the following information to complete this form: the names and addresses of the parties to the contract, a description of the contract, and the effective date of the assignment of the contract. A copy of the original contract should be attached to this form. A copy of the Copy of the Consent to Assignment of Contract should also be attached if necessary.
FindLegalForms, Inc. (“FLF”) is not a law firm and does not provide legal advice. The use of these materials is not a substitute for legal advice. Only an attorney can provide legal advice. An attorney should be consulted for all serious legal matters. No Attorney-Client relationship is created by use of these materials.
THESE MATERIALS ARE PROVIDED “AS-IS.” FLF DOES NOT GIVE ANY EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY, SUITABILITY OR COMPLETENESS FOR ANY OF THE MATERIALS FOR YOUR PARTICULAR NEEDS. THE MATERIALS ARE USED AT YOUR OWN RISK. IN NO EVENT WILL: I) FLF, ITS AGENTS, PARTNERS, OR AFFILIATES; OR II) THE PROVIDERS, AUTHORS OR PUBLISHERS OF ITS MATERIALS, BE RESPONSIBLE OR LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, OR CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT LIMITED TO, PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES; LOSS OF USE, DATE OR PROFITS; OR BUSINESS INTERRUPTION) HOWEVER USED AND ON ANY THEORY OF LIABILITY, WHETHER IN CONTRACT, STRICT LIABILITY, OR TORT (INCLUDING NEGLIGENCE OR OTHERWISE) ARISING IN ANY WAY OUT OF THE USE OF THESE MATERIALS.
NOTICE OF ASSIGNMENT OF CONTRACT
RE: Assignment of Contract
Dear _______________________ :
This notice is in reference to the following described contract:
Please be advised that as of ___________________ , 20 ______ , all interest and rights under this contract which were formerly owned by ______________________ , of ____________________ , City of __________________________, State of ______________________ , have been permanently assigned to ______________________ , of ____________________________________ , City of ________________ , State of ____________________ .
Please be advised that all of the obligations and rights of the former party to this contract are now the responsibility of the new party to this contract.