Considering a switch in your invoice finance provider? This essential guide is designed to help you understand the nuances of UCCs, streamline the transition process, and identify critical questions for selecting your next financial partner.
The UCC filing is a vital tool for invoice finance companies to safeguard their interests:
Moving to a new provider involves a "buyout" - a process where your new financier settles the balance with the old one, much like mortgage refinancing. This is formalized through a Buyout Agreement.
The buyout sum usually consists of your unpaid invoices minus reserves, plus additional fees from your previous financier. It's crucial to ask for a comprehensive breakdown to fully understand any extra charges or termination fees.
The transition can be cost-effective if you use fresh invoices for the new financier. But be aware, using previously financed invoices could lead to duplicate fees. While some financiers may offer discounts, timely communication with your former provider is essential to avoid extra costs.
Changing providers might extend the usual timeframe due to the intricacies of buyout calculations and required approvals. The buyout amount can fluctuate based on accumulating fees and ongoing payments. A seasoned financier can help expedite this process.
In some instances, both your previous and new financiers might temporarily share rights to your invoices until all balances are cleared, though this is not commonly practiced.
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