We are MI based and have a friend who runs a similar company in Arizona. They have asked us if we would be interested in purchasing their receivables thereby acting as a Factoring Company. We've never done this but we are interested because of how fiscally well run they are. My question has to do with ownership of the purchased receivables should they have to declare bankruptcy in the future (not that it is in the offing, just for our understanding).
If we have purchased their receivables, can other creditors place a lien on them or claim them as their own should the company file bankruptcy? No one could do that if we bought a computer or desk from them, but I don't know if receivables are treated differently. They currently have no business loans, only money relatives have given for start-up.
Many thanks.
If we have purchased their receivables, can other creditors place a lien on them or claim them as their own should the company file bankruptcy? No one could do that if we bought a computer or desk from them, but I don't know if receivables are treated differently. They currently have no business loans, only money relatives have given for start-up.
Many thanks.