Assignment of Receivables

Definition

The legal transfer of a company's right to collect payment from its debtors to a lender or financial institution as security for a loan or as part of a receivables financing arrangement. Assignment may be by way of security (where the receivables serve as collateral) or by way of sale (as in factoring or securitisation). Notice to the underlying debtor may or may not be required depending on the jurisdiction and the terms of the assignment.