Indiana Code 6-5.5-1-21. “Loans arising in factoring”

Sec. 21. (a) “Loans arising in factoring” means:

(1) a loan or extension of credit secured by one (1) or more accounts receivable; or

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Recourse: An arrangement in which a bank retains, in form or in substance, any credit risk directly or indirectly associated with an asset it has sold (in accordance with generally accepted accounting principles) that exceeds a pro rata share of the bank's claim on the asset. If a bank has no claim on an asset it has sold, then the retention of any credit risk is recourse. ^{Source: FDIC}

(2) a sale of one (1) or more accounts receivable in which the purchaser has recourse against the seller for an uncollected accounts receivable.

(b) The term does not refer to:

(1) a sale of one (1) or more accounts receivable without recourse; or

(2) an assignment of an account receivable.

As added by P.L.146-2020, SEC.31.