Factoring Companies Guidebook
Agency Relationships
Where the client acts as an agent for a third party without taking title of the goods being sold.
Concerns
Where the Client acts as an agent, the supplier of goods remains the principal of the contract with the customer, keeping title of goods. The Client is therefore unable to assign the debts to us as they are not owned by the Client.
Identification
Review terms and conditions and contracts for the mention of "agency" and/or "commission". Review purchase invoices for the reference to the end customer. Review sales invoices for the reference to payment of commission.
Treatment
Obtain a copy of the 'Agency Agreement' if one exists, to determine our ability to take title of the debt arising. Under no circumstances should a factor be involved in prepaying against debts arising from an agency relationship where this is not possible.
