Accounts Receivable in Florida Business
Accounts receivable represent money owed to a business by customers who purchased goods or services on credit. In Florida commercial practice, receivables function as both a measure of business health and a valuable asset that can be leveraged for financing.
Receivables as Collateral
Florida businesses frequently pledge their accounts receivable to secure lines of credit or term loans. The lender perfects its security interest by filing a UCC-1 financing statement with the Florida Department of State. This creates a priority position that protects the lender if the borrower defaults or files for bankruptcy. The quality of the receivables, measured by customer creditworthiness and aging, determines how much the lender will advance.
Receivables in Business Sales
When a Florida business is sold through an asset purchase, the treatment of accounts receivable requires careful negotiation. Sellers typically prefer to retain and collect their own receivables. Buyers may want to acquire them to maintain customer relationships. The purchase agreement must address collection responsibility, bad debt risk, and the cutoff date for allocating payments between buyer and seller.
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Barnes Walker Business Law
Barnes Walker structures business sales and financing arrangements for companies throughout Southwest Florida. Contact our business law team for transactional guidance.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC