Why the client needed our help
Via its specialist online platform, our client provides invoice finance and ‘back office’ administration support to recruitment agencies. One of its existing customers wanted to use our client’s services to obtain funding for debts that were being created in its favour in Hungary.
There was insufficient time before the end of the Brexit transition period for our client to establish an extension of its business into Hungary so we were asked to advise on an alternative solution that would enable our client to support this customer’s business expansion.
How we helped
After reviewing the terms of the receivables finance agreement already operating between our client and its customer, we advised on how, by varying some of the terms of that agreement, our client would be able to purchase new debts from its customer that would be assigned to that customer by its newly created Hungarian branch.
We prepared the form of variation letter and a debt assignment agreement between the customer and its Hungarian branch which would operate back-to-back with the varied receivables finance agreement. It was necessary to work closely with Hungarian lawyers to ensure that the debt assignment agreement was compatible with local law, and also that our client had the benefit of a valid guarantee and security over its assets from the Hungarian branch.
As a result of our detailed understanding of our client’s receivables finance documentation and specialist sector product, we were able to create a ‘back-to-back’ funding arrangement that enabled our client to extend the service it provided to its customer and support that business’ expansion into the European market place without delay.