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Accounts Receivable Financing Agreement for Australia

Accounts Receivable Financing Agreement Template for Australia

An Accounts Receivable Financing Agreement under Australian law is a sophisticated financial instrument that enables businesses to obtain immediate funding by selling their accounts receivable to a financial institution. The agreement, governed by Australian federal and state laws, particularly the Personal Property Securities Act 2009 (Cth), establishes the framework for the purchase of receivables, including eligibility criteria, purchase price calculations, operational procedures, and security arrangements. It incorporates crucial provisions for compliance with Australian financial services regulations, privacy laws, and consumer protection requirements where applicable.

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Accounts Receivable Financing Agreement

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What is a Accounts Receivable Financing Agreement?

This Accounts Receivable Financing Agreement is designed for use in the Australian market when businesses seek to monetize their accounts receivable for working capital purposes. It provides a comprehensive framework for the sale and purchase of receivables, incorporating requirements under Australian law, particularly the Personal Property Securities Act 2009 (Cth) and other relevant financial services legislation. The agreement is suitable for businesses of various sizes that generate significant receivables and need to optimize their working capital cycle. It includes detailed provisions for the purchase mechanism, pricing, operational procedures, compliance requirements, and security arrangements, while ensuring alignment with Australian regulatory requirements and market practices.

What sections should be included in a Accounts Receivable Financing Agreement?

1. Parties: Identification of the financing party (typically a financial institution) and the client (the business selling its receivables)

2. Background: Context of the financing arrangement and brief description of the business relationship

3. Definitions and Interpretation: Detailed definitions of terms used throughout the agreement and rules for interpretation

4. Facility and Purchase Mechanism: Details of the financing facility, including limits, purchase price calculations, and mechanics of receivables purchases

5. Eligibility Criteria: Criteria that receivables must meet to be eligible for purchase under the facility

6. True Sale and Assignment: Provisions ensuring valid sale and assignment of receivables, including perfection requirements under PPSA

7. Representations and Warranties: Standard and transaction-specific representations and warranties from the client

8. Operational Procedures: Procedures for offering receivables, notifications, payments, and reconciliation

9. Fees and Charges: All applicable fees, charges, and discount rates

10. Covenants: Positive and negative covenants applicable to the client

11. Events of Default: Circumstances constituting default and consequences

12. Collection and Servicing: Procedures for collection of receivables and servicing arrangements

13. Security: Security arrangements and PPSA requirements

14. Termination: Termination events and procedures

15. General Provisions: Standard boilerplate clauses including governing law, notices, and amendments

What sections are optional to include in a Accounts Receivable Financing Agreement?

1. Credit Insurance: Required when credit insurance is part of the arrangement to protect against debtor defaults

2. Cross-Border Provisions: Needed when the receivables involve international debtors or cross-border elements

3. Electronic Trading Platform: Required when the facility operates through an electronic platform or portal

4. Reserve Account: Included when a reserve account mechanism is used for risk management

5. Debtor Concentration Limits: Required when specific concentration limits apply to individual debtors

6. Field Examination: Included when the financier requires rights to conduct periodic field examinations

7. Program Manager: Required when a third-party program manager is involved in administering the facility

What schedules should be included in a Accounts Receivable Financing Agreement?

1. Schedule 1 - Eligibility Criteria: Detailed list of criteria for eligible receivables

2. Schedule 2 - Approved Debtors: List of pre-approved debtors and their respective limits

3. Schedule 3 - Fee Schedule: Detailed breakdown of all fees, charges, and calculation methodologies

4. Schedule 4 - Form of Offer Notice: Template for offering receivables for purchase

5. Schedule 5 - Operational Procedures: Detailed procedures for day-to-day operations

6. Schedule 6 - Required Reports: Templates and requirements for periodic reporting

7. Schedule 7 - Power of Attorney: Form of power of attorney for perfecting assignments

8. Appendix A - Technology Requirements: Technical specifications for electronic interfaces if applicable

9. Appendix B - Compliance Checklist: Checklist for ongoing compliance requirements

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Australia

Publisher

Ƶ

Document Type

Finance Agreement

Cost

Free to use
Relevant legal definitions



















































Clauses





































Relevant Industries

Manufacturing

Wholesale Trade

Retail

Construction

Professional Services

Healthcare

Technology

Transportation and Logistics

Agriculture

Mining and Resources

Media and Entertainment

Telecommunications

Relevant Teams

Finance

Legal

Treasury

Credit and Collections

Operations

Risk Management

Compliance

Commercial

Business Development

Portfolio Management

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Credit Controller

Accounts Receivable Manager

Financial Controller

Legal Counsel

Commercial Director

Risk Manager

Operations Manager

Credit Manager

Compliance Officer

Business Development Manager

Relationship Manager

Portfolio Manager

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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