This is a form that is used to “perfect” a creditor’s security interest in assets collateralized by debtor to secure financing. The form essentially provides public notice that the creditor intends to seize the listed assets in the event of default. By proper publication, the creditor places itself first in line for the property and thus establishes a lien on that property.

Uniform Commercial Code.

Security is any asset offered as collateral for a debt.

This is a report provided by the factoring client to the factoring agent listing information about each account receivable being factored. The report should provide enough information for the factor to effect collection and normally also provides any additional information that might be helpful such as any notes that the factoring client may have recorded about the customer.

The reserve is an amount held back by the factor from the client when purchasing accounts receivable and can be thought of as the equivalent of a reserve for bad debt. As customers pay their balances, the associated reserve may be released to the client or the factoring agreement may call for the reserve to be released upon disposition of all factored accounts receivable. If a debt proves uncollectable, particularly with full recourse factoring, the amount of the debt is first subtracted from the reserve.