What is a Notice of Assignment?

A Notice of Assignment is a letter that a factor will send to a customer that you choose to factor. The notice lets your customer know that the receivable has been assigned and that all future payments will need to go to the factor until the assignment is released.

The Notice of Assignment contains other clarifying information for your customer.

It will state how the check needs to be made out and when payments need to be mailed (or instructions for ACH payments to a specific bank account).

It will also state how the assignment is to be dissolved. In the event you want to discontinue factoring a specific account or stop factoring all together, the notice will detail who can release the assignment. The notice of assignment release will only be valid when coming from the factor’s office.  The client cannot release the assignment, it can only be released by the factoring company.

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