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The Accounts Receivable Financing Agreement is a critical document used when businesses seek to obtain working capital financing by leveraging their accounts receivable. This agreement, structured under Hong Kong law, is particularly valuable for companies with substantial receivables who need to improve their cash flow without taking on traditional debt. The document comprehensively covers the financing relationship, including detailed provisions for the assignment or charging of receivables, operational procedures for drawing funds, collection mechanisms, and security arrangements. It's designed to comply with Hong Kong's regulatory requirements, particularly those under the Companies Ordinance, Banking Ordinance, and relevant security registration requirements. The agreement is commonly used in Hong Kong's dynamic commercial environment, especially among trading companies, manufacturers, and businesses with regular B2B transactions.

1. Parties: Identifies the financing party (lender) and the client (borrower) with their full legal names and addresses

2. Background: Explains the context of the agreement, including the client's business and their desire to obtain financing against their receivables

3. Definitions: Defines key terms used throughout the agreement, including 'Eligible Receivables', 'Advance Rate', 'Collection Account', etc.

4. Facility: Details of the financing facility, including the maximum facility amount, advance rate, and financing terms

5. Assignment of Receivables: Provisions regarding the assignment or charge over receivables, including representations about ownership and quality of receivables

6. Conditions Precedent: Conditions that must be satisfied before the facility becomes available

7. Operational Mechanics: Procedures for submission of receivables, approval process, and disbursement of funds

8. Representations and Warranties: Standard and specific representations regarding the business, receivables, and financial condition

9. Covenants: Ongoing obligations of the client, including financial covenants and reporting requirements

10. Collection and Payment Procedures: Procedures for collection of receivables and operation of collection accounts

11. Fees and Expenses: Details of all fees, charges, and expense reimbursement obligations

12. Events of Default: Circumstances constituting default and consequences thereof

13. Remedies: Rights and remedies of the financing party upon default

14. Term and Termination: Duration of the agreement and termination provisions

15. General Provisions: Standard boilerplate clauses including notices, amendments, governing law, etc.