Considering a change in your invoice finance provider? This guide offers practical advice for those dissatisfied or looking for better options. We provide clear insights into understanding UCCs, the steps for transitioning, and essential questions to ask before committing to a new financial partner.
Invoice finance companies use UCC filings to secure their interests. Key functions of the UCC include:
The process of switching providers involves a "buyout." Your new provider will settle balances with the old one, similar to mortgage refinancing. This step is detailed in a Buyout Agreement, signed by all involved parties.
The buyout sum typically includes unpaid invoices minus reserves and additional fees. It's crucial to request a comprehensive breakdown to understand all charges, including potential early termination fees.
Transitioning can be financially neutral if you offer new invoices to the new provider. Be cautious of double fees when resubmitting previously financed invoices. Timely communication with your old provider is vital to avoid extra charges.
Switching may extend processing times due to buyout calculations. The buyout amount can fluctuate with accruing fees and ongoing payments. An experienced company can streamline this process.
In some cases, both old and new financiers may share rights to your invoices until the balance is settled. However, this scenario is not typical.
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