💡 Summary #
The Notification of Assignment (NOA) is a simple but critical document that tells your customer (the debtor) where to send payment.
It ensures that all funds from factored invoices go directly to Factor & Fund, keeping transactions transparent, trackable, and compliant.
⚙️ What Is an NOA? #
The NOA is a formal notice sent by Factor & Fund to your buyer after your factoring agreement is signed.
It states that:
- Factor & Fund has purchased your invoice(s).
- Payment for those invoices must now be sent directly to Factor & Fund’s designated bank account.
- All future communication about payment status should include Factor & Fund.
📄 It’s not a demand or collection notice — it’s a standard business communication between credit departments.
🧩 Why the NOA Matters #
- Payment Control: Ensures all funds are applied to the right invoices.
- Transparency: Keeps your buyers informed and eliminates confusion.
- Compliance: Required under California and federal factoring regulations.
- Speed: Prevents delays caused by misdirected payments or disputes.
✅ The NOA is a one-time setup per buyer unless payment instructions change.
🔁 How the NOA Process Works #
- After Approval:
Factor & Fund prepares the NOA and sends it to your buyer’s accounts payable department. - Buyer Acknowledgment:
The buyer confirms in writing that payments will go to Factor & Fund. - Invoice Funding:
Once acknowledgment is received, we release your advance (typically 85–90%). - Ongoing Transactions:
Any future invoices from that same buyer will already be covered under the NOA.
💬 Example Text #
“Dear [Buyer Name],
Please be advised that [Your Company Name] has assigned the payment rights of its invoices to Factor & Fund.
All future payments for these invoices should be made directly to Factor & Fund at the following account:
[Bank Name & Routing Details].
This assignment remains in effect until otherwise notified by Factor & Fund.”
⚖️ Legal Context #
The NOA is authorized under your Factoring & Security Agreement.
It does not change your buyer’s contract terms or payment obligations — it only changes the payment destination.
This protects all parties by maintaining an auditable trail of payments.
✅ Best Practices #
- Inform your buyer in advance that they’ll receive the NOA (Factor & Fund can help with this).
- Always provide accurate buyer contact info during onboarding.
- Never accept direct payments from a buyer once an NOA is active — they must go to Factor & Fund.
❓ FAQ #
Will my customer be upset about the NOA?
No. NOAs are standard practice in business financing. Buyers understand it’s a professional funding arrangement.
Do I have to send the NOA myself?
No. Factor & Fund handles it directly to ensure legal accuracy.
What if my buyer ignores the NOA and pays me?
Forward the payment to Factor & Fund immediately so it can be applied correctly.
