Lichtlabor-Berlin

The underlying objective is to allow SMEs to use their receivables as financing to raise capital by allowing them to transfer such a debt to another company. Overall, this legislation will have a significant impact on the companies involved in debt financing by facilitating such a process for SMEs. Due to the sme test and the exclusion of certain types of contracts, there will be many situations in which the regulations will not be relevant to the assignment of a debt. If the regulations do not apply, current legislation recognizes the effectiveness of contractual prohibitions on the transfer of debts. However, the case law suggests that a transfer ban is not normally interpreted as an impediment to the creation of a trust. As a result, debt sales contracts often provide that the supplier holds the debt and/or proceeds of the debt and/or its revenues in the fiduciary right for the assignee, as long as the assignment has no effect. In response, some debtors contain specific prohibitions on the creation of trusts on receivables in their contracts. However, the assignees will attempt to circumvent the practical effect of the broadest prohibition by allowing them to sue the debtor on behalf of the supplier. A debt is a requirement, a means of payment, which will be due in the future to a company. Debt financing, or so-called debt financing, is a kind of asset financing, in which a company uses its receivables as collateral on the loan, such as secured short-term loans. In the event of a default, the lender has the right to recover the corresponding claims from the company`s debtors. In short, this is the process by which a company finds money against the debts of its own book.

The company does receive an amount equal to a reduced value of the mortgaged receivables, as the age of the receivables affects the amount of financing received. The company can be advanced up to 90% of the amount of its receivables. The above provisions, which allow the lifting of such restrictions on the assignment of receivables, are included in the 2018 contractual terms (assignment of receivables) applicable to each of the clauses of a contract that came into effect on 31 December 2018 or after 31 December 2018.

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