Attorneys and Factoring Transactions
One of the facts of business life today is that the law has become complex and the body of law that an attorney must know has become much larger. There are simply more laws on the books and more legal considerations to take into account. That makes the attorney’s job much tougher today than in the past, I think.
On top of that, factoring is not as widespread as loans, credit cards and other sources of financing. As a result, some attorneys may not be as familiar with factoring transactions as with other kinds of financial transactions. For instance, even experienced business attorneys are more likely to be more familiar with loans and mortgages than with factoring.
And you have to keep in mind that no attorney (or human being, for that matter) can be expected to know everything. It just isn’t reasonable to expect.
The folks at Facteon make it a point to keep the paperwork for factoring as straight forward as possible. A good starting point for an attorney tasked with helping a client review a factoring agreement is to take the Facteon factoring test drive, which is essentially some background information about their factoring process. If you are an attorney, or if you are a business owner or manager getting your attorney involved, start them there.
Another good source of general background information is the Wikipedia article on financial factoring.
The better the grasp on the transaction fundamentals and the roles and responsibilities of the players, the better equipped the attorney will be to provide guidance and advice. And the attorney will also have a better idea of what’s reasonable and customary — and what isn’t — in factoring transactions.
