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Notice, auto-renew and termination: how leaving a factor works

Leaving usually comes down to four lines in your agreement: the end date, whether it auto-renews, how many days of notice you owe and how it must be sent, and the early termination fee. Your last day to give notice is the end date minus the notice days.

The four terms

• End date. When the current term stops. Look for the term or expiration date.
• Auto-renew. Whether it continues unless you send notice. Look for renew or automatic extension.
• Notice. How many days, and how and where you must send it. Look for the notice section.
• Early termination fee. What you pay if you leave before the end. Look for termination, buyout, or liquidated damages.

Notice

Exit fee

Contract length

Auto-renew

After you have given notice

Ask for the payoff, tell brokers only after you are out, and ask about any UCC filing. Exit Kit, notice letter, payoff, UCC-3.

Under UCC 9-513 the secured party generally has 20 days after an authenticated demand, once nothing is owed, to file a termination. States adopt the UCC with changes. This is general information, not legal advice. Cornell LII, UCC 9-513.

When is my last day to give notice?

It is the end date minus the notice days in your agreement. We do not fill that number in unless the factor published it, with a source and a date.

Switching factoring companies

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