notice of assignment (noa)

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What is a Notice of Assignment in Trucking?

Trucking companies factor invoices every day. It’s a common practice in the industry to partner with a factoring company that provides cash flow so that truckers keep hauling the goods we need daily.

What is Factoring?

Factoring is the purchasing of account receivables (invoices) at a discount. The trucking company that enters into an agreement with the factor, sells its invoices for loads they hauled and then gets an advance payment (anywhere from 70-90%). The factoring company, in turn, collects payment for that invoice from the broker. Once the factoring company gets paid by the broker, it will take its factoring fee and remit the balance of the invoice to the trucking company.

A standard part of the factoring agreement is a notice of assignment (NOA) sent by the factoring company to the broker. Factoring companies usually send brokers one NOA at the beginning of their business partnership with the trucking company.

An NOA is a legal agreement that informs the accounts payable that a third party will receive payments, rather than the original owner of the invoice. In trucking, the NOA informs a broker of the trucking company’s relationship with the factor and instructs the broker to remit all payments to the factoring company instead of directly to the carrier that hauled their load.

If the broker pays anybody other than the factoring company without written consent, and that includes the carrier, it is then required by law to repay the amount of the invoice to the factoring company.

What is an NOA Release Letter?

When is there a need for an NOA release letter? An NOA release letter is sent by the factoring company to the broker when the business partnership between the factor and the carrier has been dissolved. NOA release letters are usually brief, and they may sometimes inform the broker of where to submit future invoice payments for that carrier. If a new address to remit invoice payments is available, the factor will provide it to the broker. Otherwise, it is strictly a notice of the terminated business relationship.

Check Out the Apex Factoring Guide

At Apex Capital, we pride ourselves in transparency with clients and brokers, who are our clients’ customers. If you have questions about how to switch factoring companies or would like more information, check out our free comprehensive factoring guide .

Finding the right factoring partner can be key to growing your trucking company. Apex factoring is here to help you manage your cash flow with a variety of valuable tools as well as excellent customer service and back-office support. Visit our website or give us a call at 855-369-2739 .

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Notice of Assignment

Table of Contents

Understanding notice of assignment for accounts receivables.

A Notice of Assignment (NOA) for accounts receivables is an essential legal document in the financial world. It serves as a formal notification that a business’s rights to certain accounts receivable have been transferred or assigned to another party. This third party, often a lending institution or a factoring company, then has the right to collect the receivable owed by the business’s customers.

The assignment of accounts receivable is a common practice in business financing. It allows businesses to improve their cash flow by selling their accounts receivable at a discount to a factoring company. The factoring company then assumes the task of collecting the receivable, while the business receives immediate cash.

Why is a Notice of Assignment Important?

The importance of a Notice of Assignment for Accounts Receivables cannot be overstated. It serves several crucial functions in the realm of business finance.

First, it provides legal proof of the transfer of accounts receivables. This is essential in the event of a dispute between the business (original account holder), the factoring company, and the business’s customers. The Notice of Assignment clearly outlines the factoring company’s right to collect the account, preventing potential legal complications.

Second, it notifies the business’s customers of the change in account receivable ownership. This is important as it informs the customers that they must now pay the factoring company, not the original account holder. Without this notification, customers might continue to pay the original account holder, leading to confusion and potential legal issues.

How to Prepare a Notice of Assignment

Preparing a Notice of Assignment for accounts receivables requires careful attention to detail and a thorough understanding of the legal requirements. The key to a successful assignment is to clearly state the names and contact information of the business or original account holder of the accounts receivables and the factoring company that is purchasing the accounts receivables. This ensures that there is no ambiguity about who is involved in the transaction.

The factoring company sends the NOA to the business’s customer, or customers (if more than one). The customer(s) must sign and acknowledge receipt of the NOA and agree to the terms of the assignment. The factoring company must receive the approved NOA before commencing factoring for the business.

The Bottom Line

A Notice of Assignment for accounts receivables is a vital document in business finance. It facilitates the smooth transfer of accounts receivables, protects the interests of all parties involved, and helps businesses improve their cash flow. Understanding its purpose and how to prepare it is crucial for anyone involved in business finance.

Related Terms

Dun and Bradstreet (D&B)

Spot Factoring

Accounts Receivable

Factoring Fee

Working Capital

Commercial Credit Limit

Creditworthiness

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Factoring Notice of Assignment (NOA): Everything You Need to Know

A factoring notice of assignment (NOA) is usually required when you factor your invoices. Rest assured, NOAs are quite common in business and aren’t a cause for concern. However, it helps to understand what they are and how they work so that you can explain them to your customers as needed.

Assignment of Debt Explained

Companies transfer debt, along with all associated rights and obligations, to third parties all the time. One example of this occurs with collection companies. In these cases, the business, also referred to as the creditor, sells its uncollectable balances or assigns specific debts to the collection company. The collection company is then authorized to collect those specific balances on behalf of the creditor.

Assignment of debt may also come into play when businesses outsource their receivables and leverage certain types of funding, among other situations.

What Does Notice of Assignment Mean?

The customer, also referred to as the debtor, must be informed when a creditor assigns their debt to a third party. The document used in this process is referred to as a notice of assignment of debt.

What is a Notice of Assignment in Factoring?

When you leverage invoice factoring , you’re selling an unpaid B2B invoice to a factoring company at a discount. In exchange, you receive up to 98 percent of the invoice’s value right away and get the remaining sum minus a small factoring fee when your client pays. This means you’re not waiting 30, 60, or more days for payment. This cash flow acceleration helps businesses bridge cash flow gaps caused by slow-paying customers, seasonality, rapid growth, and more. Plus, the cash can be used for anything the business needs. This unique process means businesses can receive immediate funding without creating debt like other funding sources.

A notice of assignment is required in factoring because you’re assigning debt to a third party – the factoring company – and the customers involved need to know.

The Role of Notice of Assignment for Cash Flow

Invoice factoring stands out as a solution for businesses seeking to improve their cash flow. When a company decides to use invoice factoring, it enters into a factoring relationship, where accounts receivable and financial rights are handled differently than usual. This process involves the NOA, a pivotal document in factoring transactions. Essentially, NOA is a simple letter informing customers that the payment terms have changed and future payments should be made payable to the factoring company.

This notification ensures that there are no misdirected payments, which is a critical aspect when managing accounts payable and securing immediate cash. By using factoring, businesses can access working capital, which reduces the strain of slow-paying customers. It’s important for factoring clients to understand how factoring companies notify your customers and the implications of this process. The factoring contract typically outlines these details, ensuring that every party in a factoring transaction is aware of their responsibilities, especially regarding remittance addresses and payment information.

Factoring services offer an alternative to traditional lines of credit, providing businesses with high advances at low rates. This method is beneficial for companies that demand longer payment terms from their clients. By transferring the right to collect payments to the factoring company, the business can focus on its core operations while the finance company handles the receivables. Understanding the benefits of factoring and effectively communicating them to your customers may improve the factoring process and maintain healthy customer relationships, even when introducing new financial arrangements like invoice factoring.

The Importance of a Notice of Assignment in Factoring

Notice of Assignment in invoice factoring keeps your customers in the loop so they know who is collecting and why. It also lets them know where to send their payments. This streamlines the process and helps ensure there’s no confusion about where payments need to go.

Elements of a Factoring NOA Document

Each factoring company words its NOA a bit differently, but NOAs usually include:

• A statement that indicates the factoring company is now managing the invoice or invoices.
• A notice that payments should be made to the factoring company.
• Details on how payments can be made, including addresses, bank details, or payment portal information.
• What will occur if payments are sent to the business instead of the third party.
• A signature from someone at your business to show your customer that the NOA is authentic and a signature space for your customer to sign indicating that they’ve read and understand the document.

How Do Factoring Companies Notify Your Customers

A factoring notice of assignment is usually sent to customers by U.S. mail, though sometimes factoring companies use other delivery services or even digitize the NOA.

What Will Your Clients Think of You Factoring Your Invoices?

Sometimes, businesses that are new to invoice factoring have concerns about how customers will react to factoring or receiving an NOA. However, it’s usually not a cause for concern.

Although your factoring company isn’t an outsourcing company, it behaves quite similarly when collecting invoices. Nearly 40 percent of small businesses outsource at least one business process, Clutch reports. That means a significant portion of your customers already have some experience engaging with third parties. Furthermore, invoice factoring is growing in leaps and bounds and is expected to grow by eight percent in the coming years, per Grandview Research . Many of your customers already have experience with factoring or will very soon. Because most businesses have some exposure to factoring or will in the near future, it’s generally seen as an ordinary business practice – nothing more, nothing less.

However, even if factoring is entirely new to your customers, how they respond to your decision is often determined by how you present it. For instance, it accelerates payments without putting pressure on your customers to pay faster. It has benefits for them, too, and can help improve the relationship. This alone can actually help some businesses win bids or attract new customers. Explaining it to them this way can help soothe any concerns if customers come to you with questions.

How to Ensure Your Customer Relationships Are Protected

Most factoring companies will take good care of their customers because they are a reflection of you. Your repeat business helps ensure they’ll have repeat business. However, reviewing a factoring company’s testimonials and success stories is always a good idea to understand better how they operate before you sign up.

It’s also essential to work with a company like Viva that doesn’t send mass notifications to all its customers. We only notify those who are debtors on the invoices you’d like to factor to eliminate any confusion.

Lastly, it’s better to work with a company that provides you with 24/7 access to your account so you can see what’s paid and outstanding at a glance and can make decisions about orders using real-time data.

Request a Complimentary Invoice Factoring Quote

At Viva Capital, we always provide white glove care to the businesses we serve and their customers.As part of our service, we handle the Notice of Assignment with professionalism. Our collection experts make it easy for your customers to manage their bills and are happy to answer their questions. You’ll also have access to your personal Customer Account Portal so you can make informed decisions on the fly and always know what’s outstanding. To learn more or get started, request a complimentary invoice factoring quote .

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Table of Contents

• Introduction
• What is a Notice of Assignment?

How Does NOA Impact the Business?

The factor/debtor relationship.

In a factoring arrangement, a Notice of Assignment (NOA) is the factoring company’s first communication with the client company’s customers. It is the starting point of an ongoing relationship between the factoring company and the account debtors .

Invoice factoring is a mainstream alternative financial strategy used by small and medium-sized companies to speed up cash flow and gain immediate access to working capital. This common practice provides the accounts receivable (A/R) financing needed to support operations and fund growth. By partnering with an invoice factoring company, a business (the factoring client) sells their accounts receivable invoices at a discount in exchange for immediate cash and transfers the right to collect amounts due to the factoring company. This mutually beneficial relationship involves a third party – the factoring client’s customers ( debtors ). An essential step in this partnership is to inform the debtors that the accounts receivable have been “assigned” and future payment should be made payable to the factoring company. This communication is done by means of issuing a Notice of Assignment .

What is a Notice of Assignment (NOA)?

The notice of assignment or NOA is a simple letter that the factoring company sends to the debtors. It is used to inform them that the financial rights to invoices issued by the original lender (the factoring client) are sold to and adapted by the factoring company. There are four significant elements of this notice:

• The Notice of Assignment lets the debtor know that the factoring company will be managing the invoice .
• The document contains the essential notice that the factoring company is now the agency with the right to the payment.
• The Notice of Assignment includes all new payment information, including bank details and full instructions on fulfilling the payment.
• The letter documents other pertinent legal matters relevant to the assignment.

This notice is the first means of communication between the factoring company and the debtors. It is a crucial document to ensure that every party in a factoring transaction is fully informed of their responsibilities and asserts the factoring company’s right to payment.

Often, business owners who consider factoring are concerned about their customers’ perception. They are apprehensive thinking this type of funding may signal that the business has financial troubles. This concern is not warranted. In fact, it is a sign of sound financial planning at a time when banks are imposing harsh lending criteria and restricting credit to small and medium-sized businesses. Invoice factoring is common practice and well understood by accounting departments and personnel in most businesses.

In many cases, debtors are more than happy to deal with the efficient work practices and integration of accounting systems when working with a factoring company. Collaborating with a factoring company’s professional accounts receivable team provides several benefits to debtors, including:

Streamlined accounts payable process

Debtors understand that companies use invoice factoring to support growth, and growth is good, nurturing customer service deepens relationships.

Factoring companies work closely with a client’s customers and are very careful to manage these relationships with respect. This benefits the client as they are separated from the task of having to chase customers for payment. Instead, they can concentrate on serving the customer’s need and ensuring good service.

The factor should respond and provide reasonable proof of the assignment if questioned by the debtor. These initial communications can help to clarify the relationship between the client and the debtor, how and when payments will be made, and can provide the debtor a sense of trust with the factoring company. Should delayed payment become an issue, or if a dispute over an invoice occurs, the experienced professionals on a factoring company’s accounts receivable team are trained to manage the issue with efficiency and courtesy.

Working with a factoring company provides many benefits to improve cash flow and strengthen customer relationships. The Notice of Assignment is just the first step in creating positive synergy between a factoring company and the client’s customers.

For more information regarding invoice factoring and how it can support your company’s growth, visit eCapital.com

ABOUT eCapital

Since 2006, eCapital has been on a mission to change the way small to medium sized businesses access the funding they need to reach their goals. We know that to survive and thrive, businesses need financial flexibility to quickly respond to challenges and take advantage of opportunities, all in real time. Companies today need innovation guided by experience to unlock the potential of their assets to give better, faster access to the capital they require.

We’ve answered the call and have built a team of over 600 experts in asset evaluation, batch processing, customer support and fintech solutions. Together, we have created a funding model that features rapid approvals and processing, 24/7 access to funds and the freedom to use the money wherever and whenever it’s needed. This is the future of business funding, and it’s available today, at eCapital.

Oscar Rombola

Oscar brings over 22 years of experience and enthusiasm for alternative finance to his role as Managing Director. His deep understanding of the industry positions him as a leading consultant and a respected authority figure. Oscar's fluency in English, French, and Spanish allows him to connect with a diverse clientele and forge strong partnerships. Oscar's dedication to the field is further evidenced by his extensive industry involvement. He served three consecutive terms on the International Factoring Association (IFA) USA advisory board and currently holds the prestigious position of President and Founder of the IFA Canadian Chapter. Oscar was asked to be part of the Advisory Factoring Committee at SFNet where he mentors and participates at Factoring Webinars as a moderator and participant. Prior to his current role leading strategic relationship development for eCapital's Freight Factoring Division, Oscar held various executive positions at factoring and financial companies. He also co-founded ITC Invoice to Cash, Inc., where he served as Vice President of Business Development & Partner for over eight years. The company was acquired in 2013 by Accutrac Capital , now eCapital. Oscar's academic background includes degrees from York University and Laval University, along with Financial Advisor designations from Canada and the US specializing in alternative finance and M&A.

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2022 invoice factoring rates and costs [updated for 2024], invoice factoring vs. bank loans: what’s the difference, invoice factoring vs merchant cash advances: choosing the right funding arrangement, the right financing for your business: debt, equity, or invoice factoring, factoring for small business.

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Bankers Factoring an Employee-Owned Accounts Receivable Factoring Company

July 3, 2024 By Chris Curtin

What is a Notice of Assignment in Factoring?

Why is a factoring notice of assignment (noa) important when selling your a/r.

Table of contents

What is the notice of assignment letter, what is included in the factor financing noa, how does factoring noa impact my customers, benefits of noa factoring:, factoring arrangement: assignment of accounts receivable, notice of assignment factoring, bankers factoring difference, what is a notice of assignment in factoring.

It is a letter that informs the business owner’s customers of your relationship with a factoring company. The notice of assignment letter is the first communication between the invoice factor company and the account debtor (your customer). The factoring contract spells out the change in invoice ownership.

The invoice factoring companies will send your customers, also known as debtors, a notice of assignment (NOA) letter. It will be sent immediately when you sell your unpaid receivables. The letter is also a standard document in factoring agreements. Accounts receivable (A/R) invoice factoring is a common financial product to accelerate the cash flows of small businesses.

Factoring invoices is a time-tested business funding solution to support operations and fund growth plans. Partnering with factoring companies allows your business to receive fast cash flow by selling invoices. Moreover, sending the NOA letter is a critical step to communicate your A/R has been assigned and is payable to the factoring company.

You can also read how factoring companies buy accounts receivable .

Complete Bankers Factoring online funding application to begin your debt-free funding process including Bad Debt Protection.

Contact Bankers Factoring to learn about the factoring NOA process and how we can provide consistent cash flow funding. We partner with you and your customers to provide an elite program for your business success.

A Notice of Assignment (NOA) is a letter that informs account debtors their creditor (our client) is factoring invoices under the Universal Commercial Code (UCC) . Invoice factoring is an agreement to assign your accounts receivable (A/R) to a factoring company. So the letter communicates that a third party (factoring company) is managing and collecting your A/R. An assignment letter notifies your customers or account debtors of the transfer in ownership.

The NOA letter is the first-time customers will learn that you are utilizing factor financing. But selling your unpaid invoices to a factoring company will not concern your customer. In addition, invoice funding is a popular financing vehicle to cover operating expenses and accelerate sales growth.

Keep reading, Factoring Company: What it is and Your Best Choice .

Factoring NOA letters are standard documents sent to customer (debtor) accounting departments. Assignment letters include language regarding the arrangement:

• NOA letter informs your customers that a factoring company is managing receivable invoices
• The notice includes language stating the factoring company has the right to payments
• Your business A/R has been assigned to a third party, and payment is transferred to them
• Updated information for making payments (remittance) to factor
• Notice of assignment letters include legal clauses related to the assignment

Assignment companies send NOA to establish their ownership and management position for your receivables. That’s because letting your customers know about the receivable assignment helps them make timely payments. Moreover, the factor provides specific remittance instructions to ensure an easy transaction for all parties involved.

Keep reading How Does a Factoring Company Work ?

Selling your receivables can cause stress about sending an NOA letter to your customer. However, invoice factoring demonstrates to your customers that you are serious about your operational performance by establishing financing lines. In fact, the US factoring market valued at $3.9 billion in 2022 shows how many companies use invoice services ( IBISWorld ).

• Streamlined accounting process between your debtor’s accounts payable team and the factoring company.
• Partnering with a factoring company demonstrates your plans to grow your company and shows you are serious about your finances.
• Invoice factoring companies enhance customer service relationships by providing highly skilled professionals to communicate with your customers.

If your company works with commercial customers that demand extended credit terms, a factoring facility can help your cash flow.

Keep reading How Factor Financing Impacts Customer Relations .

A/R factoring is a type of business funding that injects working capital into companies with slow-paying customers. However, factoring agreements are not debt-financing like business loans and do not dilute your equity position. To know more, keep reading How to Finance Your Business Without Giving Up Equity .

The notice to assignment is very familiar to a business owner if you own a trucking company. It protects you against short payments and chargebacks.

Assigning accounts receivable lets your account debtors know you have transferred ownership of A/R. By selling your unpaid invoices, you receive two cash installments.

The initial cash advance, the first installment, ranges from 80 to 93% of your total A/R purchase value. The second and final installment, the factoring rebate or discount, releases the remaining balance, less our factoring fee. Therefore, the assignment of accounts receivable removes cash flow obstacles by bypassing the lengthy receivable period.

Factoring your receivables is a great way to overcome cash flow struggles. Additionally, factoring companies work closely with your customers, allowing you to focus on your business. However, with over 800 factoring companies in the US, finding a factoring company can be difficult. Bankers Factoring provides the best service with 20 years of experience. We communicate well with our customers while protecting our client’s interests.  

Notice of assignment letters (NOA) can be scary for business owners unfamiliar with invoice factoring services. Most startups, small businesses, and companies extend credit terms requiring commercial funding. Offering net 30 to 120-day payment terms places cash flow problems for most entities.

Assignment letters should not turn you away from alternative financing. Your customers are familiar with NOA factoring and have other customers working with factoring companies.

Worrying about notice of assignment letters only prevents your business from achieving its full potential as a business owner. Bankers Factoring provides the best non-recourse factoring services and manages customer relations that enhance your business profile. Furthermore, we take on the credit risk from unpaid receivables while providing up to 93% cash advances. Accelerating your receivables cycle can unleash new sales growth and operational performance. Utilize free cash flow to improve profitability.

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What Is A Notice Of Assignment In The Trucking Industry?

To understand a notice of assignment, trucking company owners first have to be familiar with factoring—and to understand factoring, we’ll have to discuss the nuances of cash flow in the shipping industry.

Basically, the challenge for fleet owners (and owner-operators) is that their customers take forever to pay their invoices. You deliver a load and issue the invoice. The shipper may take 30 or 45 or 60 days—or more—to pay that invoice. Meanwhile, you’ve got fuel costs, payroll, insurance payments, and the thousand other financial obligations that keep your trucks on the road. You need that invoice paid now .

Factoring is the industry’s solution for quick payments to carriers. A factoring company steps in and pays your invoice today. Then that company collects from your customer, the shipper or broker who hired you to haul a given load. For their service, the factoring company keeps a low percentage of the total invoice value. (With Bobtail, the factoring fee ranges from 1.99% to 2.99%, depending on the volume of invoices you factor.)

Note that factoring is not a loan; the factoring company buys your invoices, so there’s no compounding interest or credit impact. Factoring beats loans as a cash-flow solution, hands down.

Struggling with slow payments from shippers and brokers? Keep cash flowing the simple way with Bobtail factoring.

With these preliminaries out of the way, we’re ready to answer the question that brought you here: What exactly is a notice of assignment in trucking?

Defining The Notice Of Assignment In Trucking

Factoring requires shippers and brokers to make changes in their billing systems. You’re no longer the collector on a factored invoice; the factoring company is. Accounts payable departments are busy places, and it’s easy for a shipper’s finance team to get confused when you do the work but another company collects the payment (after that company pays you, of course).

A notice of assignment clears up the billing relationship in a factoring agreement. A notice of assignment is a contractual document, supplied to both the carrier and the customer, that tells the customer to pay the factoring company, not the carrier.

The notice of assignment is an essential piece of paperwork, one of the documents you’ll have to keep on file as you establish a factoring relationship. You’ll have to sign the notice of assignment, and so will your customer. In short, this is a contractual agreement that carries legal consequences, and clarifies who exactly the shipper should pay for a delivered load.

Why is a notice of assignment important?

Consider the case of a trucking company that shifts to factoring after months or years of collecting directly from a shipper. That carrier’s payment details are already set up in the shipper’s accounting systems. Due to accidents or willful fraud, it’d be easy for the carrier to collect on an invoice twice—once from the factoring company and again from the customer.

In that scenario, the factoring company loses money, or at least becomes embroiled in a flurry of paperwork and legal challenges. So the notice of assignment is designed to protect the factoring company. But this document provides benefits for you, the carrier, and your customers, too.

How A Notice Of Assignment Benefits Shippers And Carriers

Who needs more paperwork? While it may seem like just another legal document, notices of assignment are actually helpful for all three parties involved in a factoring payment deal: the factoring company, sure, but also the carrier and the customer.

For shippers , the notice of assignment is a strong incentive to update payment details in their accounting systems. It delineates the nature of the financial agreement. It provides visibility and clarity that avoids conflict down the line. Most importantly, factoring companies require shippers to sign a notice of assignment—and factoring benefits customers, too. It keeps them from having to renegotiate payment terms, and gives them the full 30 or 60 days to pay, which allows them to optimize their own cash utilization.

Carriers also benefit from the clarity that comes with a notice of assignment. This document allows you to rest assured that the customer won’t accidentally pay you for a factored invoice, so you don’t have to spend all day trying to get the money into the right hands—or face collection threats of your own.

The binding agreement contained within a notice of assignment protects you from legal problems. It’s simply smart business to make sure everyone knows exactly who should get paid, and for what. Notices of assignment accomplish this goal—and, with Bobtail, the paperwork is simpler than you might think.

Simplifying Notices Of Assignment

Traditional factoring companies aren’t the most efficient financial operators in the world. They make you sign restrictive contracts. They might even tell you who you can work with, and who you can’t. They stack hidden fees on everything from set-up to ACH transfers to terminating the deal. And they make you fill out reams of paperwork before depositing a cent.

Bobtail is different every step of the way. We started this company to eliminate the inefficiencies in the factoring process, and that includes personalized assistance with handling notices of assignment.

When you sign up with Bobtail—a quick, online process involving a single application form—you’ll get a personal account manager who’s always ready to answer questions and solve problems. They’ll issue your notice of assignment and make sure your customers understand the document and why it’s necessary.

All you have to do is carry on carrying loads.

When you decide to factor an invoice, the process is even simpler. Just deliver the load, upload the invoice, attach a rate confirmation and a bill of lading, and get paid. It’s all done through Bobtail’s online system, so you can handle financing from the rig. We also provide a user-friendly digital dashboard that makes it easy to track every invoice at every step of the financing process. There’s simply no easier way to factor an invoice.

At Bobtail, we believe that you know what’s best for your business. That’s why we don’t make you sign a long-term contract; this is no-contract factoring. You pick which accounts to factor and which to collect from directly, and we don’t have volume requirements or exclusive financing deals.

We also don’t charge hidden fees. You just pay a flat factoring fee so there’s no confusion on exactly how much cash will hit your bank account—or when. Invoices are filled the same day you submit them, or the next day if the invoice arrives after 11 a.m. Eastern time.

Don’t be intimidated by a notice of assignment in trucking—or any other documents related to your factoring service. With Bobtail, our devoted customer service team makes sure everything runs smoothly, and we’re there to help every step of the way. Or, as one Trustpilot review puts it:

“They always answer the phone! The staff is very helpful and cordial. The three things I love are: Payments are on time, the website is easy to use, and great customer service!”

(Read more customer reviews on Trustpilot.)

Ready to improve cash flow without the headaches? Sign up to learn more today.

If you have questions about account set-up, notices of assignment, or anything else related to factoring, contact the Bobtail sales team at (410) 204-2084, or email us at [email protected].

Caroline Asiala is the Digital Marketing Manager at Bobtail. With a background rooted in advocating for migrant rights, Caroline leverages her expertise in content creation to support small trucking businesses, many of which are immigrant-owned and operated, with the information they need to make their businesses thrive.

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What is a Notice of Assignment?

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When you enter a factoring contract, you agree to sell your invoices, or accounts receivable, to a factoring company or third party that gives you a cash advance. This third party will then become your company’s collection department on these invoices. To notify your clients of this change of invoice ownership, the financial provider will send them a Notice of Assignment (NOA).

If you’re considering factoring your accounts receivable, you may be wondering what an NOA contains and what effects it may have on your customers and business. In this guide, we’ll cover the components of an NOA, how your factoring company sends them, and their role in the factoring process.

What is a NOA in Factoring?

A notice of assignment is a simple letter from a third party to your customers. It legally explains that a change of invoice ownership has occurred, informing your clients that a third party (bank, factoring company, financing company) will now manage and collect accounts receivable. The NOA will provide a remittance address so customers can update their payment information. The purpose of this communication is to notify your customers of a change in the collection process.

What Is a Notice of Assignment?

Understand how implementing a Notice of Assignment with Porter Capital’s factoring services can fast-track your receivables!

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How Do Factoring Companies Notify Your Customers?

Factoring is more common than ever and clients range from NYC modeling agencies and namesake branded product line manufacturers, to small startup companies selling gourmet food items. No company is too large or too small to factor their invoices and many work with big box stores that demand longer payment terms to have products on their shelves. These 90 to 120 day payment terms can make factoring a necessity for smooth cash flow.

Your customers will receive the NOA as a letter in the mail to sign and return. Your business will also receive a copy of this letter. Ensure you fully understand the language used in the NOA and your responsibilities in the transition process. Sometimes business owners worry about their customers’ reactions to receiving an NOA. Invoice factoring is becoming an increasingly popular and acceptable means for financing businesses across many industries, so your customers may already be accustomed to the process. You can alert your clients about a coming NOA, proactively resolving any questions or concerns that may arise.

Why Is a NOA in Factoring Important?

When you enter a factoring contract, you agree to sell the intangible financial rights to your invoices and receive cash up front for those invoices. Because the rights are intangible, factoring companies need legal language that outlines ownership of the AR. Once the NOA is completed, a business receives the cash advance while the factor waits for invoice payments. The NOA is a critical part of the financial relationship and protects the financing provider in the event of misdirected payments. An NOA ensures all parties are aware of their responsibilities throughout the factoring process so everyone can enjoy the benefits.

Components of a NOA Document

The NOA document will contain a few vital pieces of information, including:

• Notification that accounts receivable have been assigned and is payable to a third party
• An updated payment address.
• An explanation of customer liability in the event of a misdirected payment.

Each component of the NOA ensures the factoring relationship runs smoothly by giving customers the information they need to make correct payments. It may also outline steps for your company to take if you receive a misdirected payment.

Contact Porter Capital for a Factoring Quote

When you need to improve your cash flow, consider invoice factoring with Porter Capital. With over 30 years in the business, we can offer you and your customers the reliable and trustworthy services you expect and deserve. We will help you find the best solutions for your specific business demands, enabling you to enjoy greater stability and flexibility.

Work with a trusted factoring company to expand your business, get ahead of the competition and increase customer satisfaction. Contact us online today to receive a quote for our factoring services.

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What is a Notice of Assignment?

Last Updated May 1, 2024

If you’re a business owner considering invoice factoring, the Notice of Assignment (NOA) may cause you some concern. What will my customers think? Why is it necessary? Can we skip sending it? Let’s address these questions to clarify what the NOA covers and put to rest any lingering apprehension.

What Is a Factoring Notice of Assignment?

The notice of assignment (NOA) informs your customer that a third party (bank, financing company, or factoring company) will manage and collect your accounts receivable (AR) going forward. The NOA arrives in the mail in the format of a letter, as the initial communication notifying your customers of the change in structure and process.

What Will My Customers Think?

Tremendous growth in the use of invoice factoring across many industries has made factoring more common than ever. According to the Global Factoring Market 2016-2020 report, analysts expect factoring to grow over 10% annually for the next several years.

Many of our factoring clients work with Fortune 500 companies who simply demand longer payment terms in order to do business. Clients using invoice factoring often show an appetite for accelerating growth and more efficiently managing operations and collections.

In short, you are most likely more concerned about it than your customers. Factoring is a widely used and acceptable means for financing your business.

Why Is a Notice of Assignment Important?

In a factoring relationship, a business sells the future collection of accounts receivable (AR) in exchange for cash advances. So, the asset (future AR) belongs to the third party upon completion of the work or delivery of the goods. The business receives the cash advance, and the third party waits for payment by the business’ customer.

Mildred Glaze, Senior Account Manager at altLINE, explains further, “The factor sends out the notice of assignment to be sure they place their client’s customers on notice to submit all payments to the factor and not to their client. The factor will essentially become their client’s accounts receivable department, documenting invoices and payments.”

Due to the intangible nature of AR, the third-party provider needs legal language showing ownership of the AR. Thus, the legal language found in the NOA minimizes the risk placed on the third-party provider. Third party providers require a NOA. It is critical to the structure of the factoring relationship and protects the third-party provider in the event of misdirected payments.

In the case of a redirected payment, Glaze explains, “If a payment is in inadvertently sent to the client [instead of the factoring company], then the client turns around and forwards/sends the original method of payment to the factor…We then turnaround and re-notify that particular customer to have them confirm updating the remittance in their system.”

What Is Covered in a Notice of Assignment?

The main points covered in a Notice of Assignment include:

• Business’ accounts receivable has been assigned and is payable to a third party provider
• Updated payment address, typically a lock box
• Liability on the customer in the event of misdirected payment

How We’re Different

By working with altLINE, your customers recognize the reliability and stability of your financing partner. Rather than receiving an NOA from an unknown entity or independent financing company, the bank’s reputation as the lender of choice strengthens your customer relationship.

Read our article on the benefits of factoring through a bank for more information or get a free quote today!

What does a notice of assignment mean in trucking?

A notice of assignment (NOA) is a document that notifies your customers that your factoring company has the right to collect payments on invoices. In a factoring relationship, a business sells its invoices to a third-party factoring company, which then collects payment on them. An NOA notifies your customers of this change in structure.

Who provides a notice of assignment?

Grey was previously the Director of Marketing for altLINE by The Southern Bank. With 10 years’ experience in digital marketing, content creation and small business operations, he helped businesses find the information they needed to make informed decisions about invoice factoring and A/R financing.

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When you assign your receivables to a factoring company in the trucking industry, you agree that your client payments go directly to the factor. The factor ensures that you are paid for each freight you deliver and on signing, they send your clients a notice of assessment (NOA).

The NOA document is basically the letter a factoring company sends to its customers. It informs them that the accounts receivable are assigned and how they can make future payments by directing them to the factoring company. As receivables are not tangible goods, a notice of assignment is how factoring companies can claim financial rights to the invoices you sell to them. 

Exploring the Basics of Notice of Assignment 

When you  sign up with a factoring company  to streamline payment for your freight services, they send out NOAs to protect themselves, ensuring they receive payments from your clients. There is specific information that needs to be included in an NOA to solidify the agreement. According to  the Uniform Commercial Code  (UCC), the notice must follow these rules:

• It must have the factoring company or client’s signature.
• It must advise the account debtors, the customer, of the outstanding amount now assigned to the factoring company.
• It must confirm that the payment is to be made to the factoring company directly.
• It must include remittance details to inform the debtor how to make payment.

As such, the NOA offers you the following benefits:

• No more waiting for payments — the factoring company will take on remittance.
• The NOA helps to ensure there are no misdirected payments, allowing you to access working capital immediately.
• You can bypass the need for lines of credit when clients fail to pay on time.
• As this letter makes the factoring transaction official, you can focus on your business’s core operations instead of working to collect payment from clients.
• The NOA keeps your customers updated, so you need only focus on general relationship management.

The Significance of NOAs Across Industries

Sending out this legal notification to your client is vital, especially in industries like trucking, where invoice factoring is common practice. It can impact your business and professional relationships in the following ways:

• Avoiding payment disputes:  With clear communication through NOAs, your business can prevent payment disputes or misunderstandings.
• Industry-standard compliance:  Cash flow management is crucial for operations in industries like trucking. Sending NOAs helps your business align with industry standards and best practices, demonstrating your commitment to responsible business practices and financial transparency.
• Legal and contractual compliance:  The NOA formalizes your clients’ notification of invoice factoring, aligning with legal and contractual obligations.
• Maintains trust and relationships:  Proactively sending NOAs demonstrates your professionalism and honesty, helping to keep the trust you are building with your clients. 
• Smooth cash flow:  Sending NOAs helps the factoring process run smoothly which leads to timely funding.
• Transparency and communication:  NOAs allow you to be transparent about your financial operations and let clients know how their invoices are managed. 

Navigating the Challenges and Opportunities of NOAs

The primary concern about switching to invoice factoring is about what your clients will think. They may be unfamiliar with this practice, making it essential to reassure them that this is common practice for small and midsize organizations through direct communication. 

In fact,  37% of small businesses outsource  some business processes. Ensure that they understand the benefits of this service, like extended payment terms. Finally, reassure your clients that nothing changes in terms of the service they have come to know and trust from your company. 

Answering Common Questions About Factoring and Invoice Factoring

Now that you understand the NOA role, how do you feel about signing up for freight factoring? Here are  some frequently asked questions  we get about this service and how freight brokers or owner-operators will benefit:

• What is freight factoring?  With freight factoring, truckers get their payment for work they have done immediately. The freight billing company purchases the trucking company’s invoices to ensure that these are paid as soon as possible.
• Is invoice factoring a reliable service?  Factoring services in the United States will enjoy a  compound annual growth rate of 8.1%  between 2022 and 2023, showing that these services are common and here to stay.
• What is better, freight factoring or a bank loan?  Freight factoring ensures that you get cash without going into debt. Taking on a bank loan may stop you from getting another loan for equipment you need or extra trucks as it can indicate credit troubles in your organization. 
• How are my customers paying their invoices?  The factoring company pays you for each invoice you issue and they make up their money when your clients pay them directly.
• What if my company received a payment that the factoring company should have gotten?  You assign all of your invoices to the factoring company, but if you receive a payment in error, do not deposit the money into your bank account. Notify your factoring company and send it their way immediately. Follow this up with another NOA to ensure the client knows how to proceed moving forward.

Understanding How FactorLoads Can Help

FactorLoads offers freight invoicing to help improve your trucking business cash flow. Aside from sending out these NOAs, our services include:

• Freight factoring:  Our services ensure you have accessible cash flow, which you can redirect to other areas of your business. No more waiting for money that is due to you.
• Recourse and non-recourse:  We pay upfront when you submit bills, but note that this service comes at a higher cost.
• Spot factoring:  With this flexibility, you take control over your finances by choosing when and with which clients you want to implement factoring. 

Leveraging NOAs for Business Growth With FactorLoads

The NOA paperwork is vital to your organization’s paperwork as it informs clients of the change in invoice ownership, reflecting the information they need to make payments accordingly.

FactorLoads is a freight factoring company that understands the pressure you are under while waiting for load payments. We have years of experience helping companies like yours get their cash the right way. We don’t require contracts and have no hidden fees. You get 24/7 full factoring services so you can access your money as soon as a client is approved. 

Let us take the pressure of invoice remittance off you —  contact us today  to discuss your business needs and start saving money while you improve your daily operations.

(216) 292-5660

216.930.1983

Learn About Notice of Assignment for Invoice Factoring

In a  factoring  relationship, you agree to assign your selected receivables to the factoring company. By advancing your  cash  against your invoices, the factor has purchased the right to collect amounts due from your customers. The Notice of Assignment is a critical part of your factoring paperwork as it reflects the change in invoice ownership.

What is a Notice of Assignment?

The Notice of Assignment is a simple letter the factoring company sends to your customers whose invoices you are factoring. In writing, the notice informs your customers that the accounts receivable is assigned, and future payments should be made payable to the factoring company. The notice will also include a remittance address so your customer can change their payment information.

The Notice of Assignment legally explains to your customers that any payments they make to you instead of the factor will not satisfy their obligation. The factoring company may hold your customers liable for misdirected amounts. This may occur if your customers choose to ignore the notice or fail to update payment information.

Many factors will require your customers to sign and return a copy of the notice to acknowledge receipt. This is not always required, though. Instead, the Notice of Assignment may include language that considers your customer’s continued use of your services to constitute an agreement to the notice. In addition, the factor may only revoke a Notice of Assignment if they send a signed and notarized release notification to your customers. They will do so if you choose not to factor that account any longer or you end your factoring relationship. In either case, the account must have no outstanding balance.

What Programs Don’t Use a Notice of Assignment?

Financing programs that do not use a notice of assignment include non-notification factoring and sales ledger financing.

Non-notification factoring is similar to regular factoring, but with a few key differences. Instead of sending a conventional Notice of Assignment to customers, the factoring company informs them of a new payment address using the company’s regular letterhead. This allows the customer to still send payments to the new address without being aware that it belongs to the factor. To qualify for non-notification factoring, companies typically need to have monthly revenues of at least $300,000, a track record of over a year, reliable financial reports, and no serious financial difficulties.

Sales ledger financing operates like a line of credit based on outstanding receivables. Companies can access up to 90% of their outstanding receivables at any given time without the need to submit a factoring schedule of accounts for each transaction. Although the finance company still handles payments, the customer does not receive a Notice of Assignment. Instead, they receive a letter indicating a change in the payment address. Sales ledger financing offers greater flexibility compared to non-notification factoring, with daily rates allowing for better cost control. The qualification requirements for sales ledger financing usually include monthly revenues of at least $300,000, a track record of 1-2 years, reliable financial reports, good receivables management systems, and no serious financial difficulties.

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Why do Factoring Companies Notify Your Customers?

The Notice of Assignment is a vital form of protection for a factoring company. It protects the factor in case the  business owner  (the factor’s client) receives the payment instead of the factoring company.

In a best-case scenario, the notice serves to inform every party in a factoring transaction of their rights and responsibilities. It also gives your customer the appropriate address to make account payments, allowing your factoring relationship to continue smoothly.

In a worst-case scenario, a factor can recover unpaid amounts from your customer should they continuously pay over notice or not pay at all. A Notice of Assignment is evidence in any legal proceeding — from a demand letter for payment to a full-fledged lawsuit — that asserts the factor’s standing and rights to payment.

What Will Your Customers Think?

Customers may have concerns or questions when they receive a letter regarding the use of invoice factoring. It’s understandable that they may be unsure or unfamiliar with this financing tool. As a business owner, it’s important to address these concerns and communicate with your customers effectively.

First and foremost, it’s essential to acknowledge that invoice factoring is a common practice utilized by many small and midsize companies to finance their operations and facilitate growth. Chances are, your customers are already aware of this financing method and how it works.

When discussing invoice factoring with your customers, emphasize the benefits it provides to them. By using factoring, you can offer them extended payment terms, such as 30- to 60-day terms, while still ensuring excellent service. This enables your customers to utilize their available cash resources more effectively. Without factoring, providing extended payment terms might be challenging, especially for businesses experiencing growth.

It’s crucial to assure your customers that little is changing in terms of the services and support your company provides. Reassure them that they will still have the same level of communication and engagement with you and your employees as before. Highlight that despite factoring being implemented, your commitment to their satisfaction remains unchanged.

Address the misconception that factoring indicates financial trouble within your company. Remind your customers that factoring is a versatile tool used to achieve various goals and objectives, just like other forms of financing such as loans or lines of credit. Factoring simply serves to smooth out your cash flow and support your business’s overall financial stability and growth.

Overall, open communication with your customers is key. Provide them with transparency and reassurance, explaining the benefits of factoring and emphasizing that it is a common and established financing practice. By effectively addressing their concerns, you can foster trust and maintain strong relationships with your valued customers.

Why a Notice of Assignment Matters To You

You will receive a copy of the Notice of Assignment that the factor sends to your customers. While the notice is to inform your customers, it also has an important implication for you as well.

As your  factoring agreement  explains, payments your company receives from your customers over notice are payable to the factoring company. Even in the smoothest transition, you may receive payments sent before receipt of the notice or released before your customers’ updated their payment system. There will likely be a provision explaining the procedure for sending misdirected payments to the factor in these cases. Misdirected payments are usually sent by overnight check or via bank transfer.

However, you may be responsible for additional penalties and fees if your customers continue to pay over notice, and you deposit those payments into your account. In addition, you may end up owing more, depending on fee structure, due to the extra time it takes for the factor to receive payment. Some factors include a misdirected payment fee in the  factoring agreement  that you will have to pay if you fail to return misdirected payments to the factor. Therefore, fees may be higher if you are responsible for the misdirection.

As with any legal document, be sure to be fully aware of the language used within the Notice of Assignment. Be mindful of your customers’ responsiveness to the notice. Take action immediately if you realize that any of your customers are not sending their payments on time. This transparency solidifies your factoring relationship, builds trust with your factor, and protects your interests.

What if the Payment is for an Invoice I Didn’t Factor?

When you assign your customers’ receivables to your factoring company, you agree to direct all payments to the factor, even for invoices that you did not factor. This eliminates complications for all parties and ensures that the factoring company receives every payment they should. Without an all-inclusive assignment, your customers would receive a notification every single time you factor an invoice. They would have to retain two addresses on file, increasing the likelihood of misdirected payments.

Your factoring company will have a straightforward procedure in place to address non-factored payments. This may include applying those payments to open invoices and sending you the difference or the total amount in a regularly scheduled reserve release. Stay prepared by asking your factor about their policies surrounding non-factored payments.

Factor Finders can help you find the right factoring company  for your  invoice factoring  needs.  Contact us  to learn more about our factoring services for every industry and to get started today.

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The Role of a Notice of Assignment in Invoice Factoring

• April 27, 2023

When using invoice factoring, you sell and assign the rights, title, and interest in your accounts receivable to a factoring company. The rights you assign include the right to receive payment for the accounts receivable. A Notice of Assignment is a document that is used to notify your customers that you have sold accounts receivable to a factor.

What is Included in a Notice of Assignment?

A Notice of Assignment (“NOA”) is a letter sent by the factoring company (“factor”) to your customers (aka “account debtors”) notifying them that the ownership of your accounts receivable, or invoices, has changed hands to the factor, and payments should be made in accordance with the instructions provided.

The Uniform Commercial Code (UCC) provides guidance on certain information that must be included in the NOA in order to make it effective.  The notice must:

• Advise your customer, the account debtor, that the amount/ invoice due has been assigned to the factoring company
• Advise that payment is to be made to the factoring company and not any other party
• Include remittance details so your customer is informed how payment should be made
• Be signed by the factoring company or the client

In some cases, the NOA may include language that deems continued use of your services to be consent to the terms of the NOA. The factor can, however, require your customers to sign and return a copy of the NOA to acknowledge receipt. Enforceability of a NOA is reliant on proof of receipt by the account debtor therefore, it is important to send the notice in a manner that provides proof of receipt by the account debtor.

The factor may revoke an NOA by sending a signed and notarized release notification to your customers. They will revoke an NOA if you decide not to factor an account any longer or if the factoring relationship has been terminated. An NOA can only be revoked if the account has no outstanding invoice balances.

The Importance of Sending a NOA to Your Customers

The NOA informs the parties to a factoring transaction of their responsibilities and provides the remittance details needed to make payments, so your factoring relationship flows smoothly without interruption. It also protects the factor in case you, the client, receive the payment instead of the factoring company.

From a legal perspective, a NOA explains to your customers that any payments made to you instead of the factor will not satisfy their obligation to pay outstanding invoices. Your customers may be held liable for payments made to you if they ignore the NOA or do not update accounts payable information.

If your customers continue to pay you for factored invoices, and you deposit those payments into your bank account, it is important to note that you may be responsible for penalties and additional fees for the extra time it takes for the factor to receive payment. Your factoring agreement may also include a misdirected payment fee you will have to pay if you fail to send the misdirected payments to the factor.

The best way to avoid any penalties or additional fees is to monitor customer compliance with the terms of the NOA, and take steps immediately to correct any situations where customers are misdirecting payments to your company instead of the factoring company.

Handling of Payments for Non-Factored Invoices

When you factor your accounts receivable, you agree to direct all payments for all current and future invoices to the factor, including payments for invoices you did not factor. This avoids the confusion that would otherwise occur, ensures the factoring company receives every payment, and streamlines the payment process. It prevents your customer from needing to maintain two vendors in their accounting system with differing payment instructions and reduces the likelihood of misdirected payments.

Your factoring agreement will include a procedure for handling payments for non-factored invoices. This may include sending you the total amount in a reserve release or applying the payments to open invoices and sending you the difference. Typically, when a factor receives payment for a non-factored invoice, the proceeds will be forwarded to you once the funds clear their bank account. Make sure you understand the procedure so that you comply with the NOA and avoid possible confusion affecting your relationship with your customer and the factor.

Explaining Your Decision to Factor to Your Customers

Before you begin a factoring relationship and your customers receive a NOA, it is always a good idea to explain to your customers why you have decided to factor their invoices.

Your customer should understand that your decision to factor is a positive step intended to improve your finances. Factoring is not a loan. Factoring provides access to working capital and cash flow so you can purchase materials/supplies, improve staffing and facilities to meet or exceed customer requirements and take on new or larger projects.

Invoice factoring allows you to continue offering the same payment terms your customers currently enjoy. Furthermore, you may be able to offer better payment terms based on the factoring facility.

It’s important to let customers know that outside of invoicing, their relationship will not change. You will still be providing the highest level of quality products and services. Customers want to be assured their business will not be impacted by your decision. The more you can do to assure customers that most things will not change, the more likely they will be comfortable

—–

The NOA is an important document that facilitates invoice factoring. It explains how payments are to be handled so that transactions flow smoothly between your company, customers and the factoring company.

Capstone is a leading commercial finance company that provides a range of financial products designed to meet the cash flow and working capital needs of nearly any type of business, including trade financing, invoice factoring, and PO financing. Contact Capstone at (212) 755-3636 to learn how invoice factoring can accelerate the conversion of your accounts receivable into immediate cash.

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What is a Factoring Notice of Assignment?

July 15, 2012 by Marco Terry

The Notice of Assignment (NOA) is a document that factoring companies use to notify your customers that your company is using invoice factoring. Most factors have a customized version of the NOA. However, the NOA usually informs your customers:

• That you are working with a factoring company
• To submit payments to a new account/address
• About the factoring company’s financial rights

Why do factoring companies use an NOA?

Invoice factoring transactions use a different structure than conventional financing transactions. In most cases, the f actor purchases your accounts receivable in exchange for an immediate payment. The factoring company isn’t lending money to your company. The Notice of Assignment advises your customer that the invoice has been factored and that payment is due to the finance company.

What will customers think?

Some clients have concerns regarding what their customers will think about the factoring relationship. This concern is understandable. However, factoring is well-known since it’s a common way of financing small companies. It is widely used in many industries, including business services, oilfield services , transportation , and staffing .

Some smaller customers may not be familiar with factoring and could have concerns about the service. These concerns can usually be resolved by discussing the following three points.

a) Factoring benefits your customers

Companies get factoring because they have low cash flow, but their customers ask for net-30-day payment terms. A factoring line enables you to offer your clients net-30 days terms, which is to their benefit.

b) Your company still provides services and support

Explain to your customers that your company will still manage all delivery, service, and support issues. Your customer will deal with familiar people. The factoring company handles only the processing and receipt of payments.

c) Your company is not in trouble

Some clients are concerned that their customers will think they are in financial trouble. Factoring is a financing solution, just like bank loans and other problems. Getting financing does not necessarily indicate financial problems. It’s a tool that helps smooth out operations and foster growth.

Are there options that don’t require notification?

There are some forms of accounts receivable financing that do not require notification. These solutions minimize (or even eliminate) the need for your customers to be notified. However, they have far stricter qualification requirements than conventional factoring lines.

a) Non-notification factoring

A non-notification factoring line is similar to a conventional factoring line, except that your client does not receive a Notice of Assignment. However, they may get a direction of payment notice using your company’s letterhead (note: the process varies). To qualify for a non-notification line, companies usually must:

• Have a minimum of $1,000,000 in A/R
• Be profitable
• Show a track record of 12 months
• Be able to provide reliable financial statements

b) Asset-based loan

Another alternative is to use an asset-based loan structure only on your Accounts Receivable. These lines are structured to behave like a line of credit secured by A/R. They are also priced differently and may be slightly cheaper than conventional factoring lines of similar size. However, these lines have a minimum of $1,000,000 of A/R and often come with covenants.

Get more information

Are you looking for a factoring quote? We are a leading factoring company and can provide you with high advances at low rates. For more information, get an online quote or call us toll-free at (877) 300 3258.

Our Locations

701 Birckell Ave., Suite 1550 Miami, FL 33131 (877) 300-3258

1 Yonge Street, Suite 1801 Toronto ON M5E 1W7 (877) 300-3258

CBD Sydney, NSW 1300 856 894

What Is a Factoring Notice of Assignment?

If you have already worked with a factoring company, then you have probably heard the term Notice of Assignment (NOA) before. There can be so much paperwork involved with the operation of a small business these days. It can be hard to keep up with the times and know what everything is. 

For example, a notice of assignment (NOA) is actually a very common document utilized in the trucking industry. It’s ideal for companies using a factoring transaction service because a factoring fee will pay them on the load in advance.

From there, the factoring company will be responsible for collecting payment for the service from the customer. Today, we will be taking a deeper look into the Notice of Assignment to better understand the importance of NOAs and why we need them. 

TAFS is More than Freight Factoring

How does an noa work.

Once a factoring company has paid the client for the load, it is important that the debtor knows that the money they owe is now due to another party. This official notification is delivered via a Notice of Assignment. It will be sent out to the debtor as a way of informing them that their payments must now be remitted to the factoring company instead of the carrier. 

Why is an NOA Important?

An NOA is a legal document that acts as a way of notifying the debtor about who they need to pay. When a carrier works with a factoring company, the TAFs Factoring carrier will be paid in advance by the factoring company, so it is important that the debtor is informed of the presence of the third party that will now be managing that company’s accounts receivable (AR). 

An NOA can also ensure that the debtor understands there’s a third party that will be collecting payments from them on behalf of the carrier. Notifying the debtor of this change will make it more likely to avoid payments being sent to the wrong party as well as conflicts and violations of the factoring client agreement.

What Is Covered in an NOA?

In a standard Notice of Assignment, you will find legal forms stating that the assignment of accounts receivable of the business has been assigned to a third-party provider. As such, payments are now payable directly to them. 

The NOA will include an updated address of the third party so that the debtor knows where to send any future payments, as well as the third party’s phone number and a statement letting the customer know that he or she will be held liable in the event of a misdirected payment. 

Will Factoring Affect My Work With My Client?

Working with a factoring company should not negatively impact any work that you do for your clients. The truth is that factoring is extremely common these days and in the larger picture, most business owners work with some form of a lender. 

What you can do on a personal level to avoid any confusion or worry is to simply assure your customers that invoice factoring will not affect the service you are providing to them and they can continue to expect the same level of service and attention in working with you. 

What Will Customers Think When They Receive an NOA?

Nowadays, a large percentage of companies use factoring or some sort of third-party financing option to help keep their operations flowing smoothly from one invoice payout to the next. This is often a display of good business management and dependability in the eyes of your clients. By taking control of your company’s finances, you’re letting them know that you are serious about your business and you plan to be around for years to come.

Is There a Financing Option That Will Not Send an NOA?

Select factoring companies may offer what is known as a non-notification factoring plan in which a conventional deed of assignment is not used. This plan is not often used because it leads to unnecessary confusion, which often results in payments being sent to the wrong party. 

This happens because no matter what, the debtor is still required to mail the payment to the factoring company, but instead of an NOA being issued and making this clear, the company’s letterhead is included. 

Example of an NOA

An NOA is often used in circumstances where a trucking company is utilizing a factoring company to manage their receivable financing for them. The Notice of Assignment is sent to the debtor with clear notification that the accounts receivable of the company they are doing business with are being managed by a third party.

It will properly advise the remittance address for their payments moving forward. With this official notice being received it is now up to the debtor to comply and update their system to make sure payments are processed to the correct party. 

4 Things To Consider When Factoring 

If you are going to use a factoring company here are some things you may want to consider regarding the NOA. 

Responsibility

The responsibility lies with both the carrier and the factoring company. The factoring company will send NOAs to many debtors but it is hard for a factoring company to know every customer a carrier has or will work with. For this reason, the responsibility also falls on the carrier as well to notify all of their customers of the new payment conditions. 

Requirements

The Notice of Assignment is required to be sent out so that the customer is fully aware of who they are legally obligated to pay. Without this notice, many payments would be sent to the incorrect party causing many issues that would deeply complicate the process.

If the trucking company accepts payment from the customer when it should have gone to the factoring company, the trucking company would be in violation of the contract and could be assessed additional fees or charged with fraud. 

Being notified of a factoring company being used is not a bad thing. Utilizing a f actoring company allows the carrier the ability to maintain operations within the windows of payment terms on the loads which may not pay out for 30 days or 60 days. In some cases, it might even be 90 days. 

Most factoring company contracts require carriers to submit every single invoice to minimize the likelihood of causing confusion. If the debtor has to change who they pay for different invoices, the odds are that errors will occur and payment will be sent to the wrong place. That is also why debtors don’t change who they pay after receiving an NOA unless they have an official release letter from the factoring company. This is a red flag for a carrier trying to commit fraud.  

Receiving an NOA Is Actually a Good Thing

In conclusion, we now know that receiving an NOA will inform the recipient that the carrier they used is collecting money via a factoring company or other third-party business. As such, they will not be managing their accounts receivable. This means they are taking their business seriously and making moves to ensure their company will be around for years to come, and with the ability to grow and expand.

More From Education

8 benefits of fleet management software, how task automation is enhancing fleet management , how to implement a fleet safety program, best team driving companies.

FreightWaves Ratings reference a list of approved sources for use of research to support editorial research and drafting. These include the Federal Motor Carrier Safety Administration , U.S Department of Transportation , Better Business Bureau® , International Fuel Tax Association, Inc , Federal Highway Administration , additional Federal, State, and Local government websites, internal data compiling, original research, and commentary from industry experts.

As one of the industry leaders, TAFS assists trucking companies to increase cash flow with some of the lowest factoring rates in the industry and a 1-hour advance option.

TAFS Freight Factoring

As one of the industry leaders, TAFS assists trucking companies to increase cash flow with some of the lowest factoring rates in the industry and 1-hour advance option.

Notice of assignment in invoice factoring

Many businesses that are underserved by banks - such as startups and those engaged in international trade - are turning to alternative funding solutions, such as invoice factoring, to access liquid capital, reaping the rewards in speed, efficiency, and simplicity. However, each of these financial services includes documentation to ensure a smooth process and to avoid relationships or contracts breaking down. For example, in an invoice factoring agreement, the finance provider must issue a 'notice of assignment'.

In this guide, Stenn explains what a notice of assignment is and its role in an invoice factoring agreement.

What is a notice of assignment (NOA)?

A notice of assignment is issued in an invoice factoring agreement - in which an intermediary provider buys a company's accounts receivable and assumes responsibility for chasing payment from the debtors.

In this agreement, the factoring company must advise each debtor that it has taken ownership of the right to collection.

A notice of assignment (NOA) is the legal document presented to the owing party, proving that the invoice factoring company is eligible to assume ownership of debts owed to their client. It's a legal agreement that informs accounts payable that a third party will receive invoice payments instead of the original invoice owner.

What is included in an NOA?

A notice of assignment (NOA) is a legal document that must be drafted in a certain format, with several key elements that must be included. These are essential in providing the terms, contract information and stipulations of the debts being bought:

• Proof of Assignment: All notices of assignment must include proof of debt ownership. This must include a warning that accounts payable shall now be directed to a third party, who that third party is and the accounts that need to be paid.
• Address: The notice of assignment must include a new payment address associated with the factoring provider.
• Liability Warning: An explanation and warning of the parameters for customer liability in the event of a misdirected payment and the repercussions for missed payments.

Why is an NOA important in factoring?

A notice of assignment is important in factoring as it gives the debtor a clear outline of whom further payments will be sent to, and the third party now involved in taking over debt liability.

It also provides a factoring company with proof that they now have ownership over those liabilities. This allows for smooth and effective cross-party communication and outlines the responsibilities of both parties in binding legal terms.

This represents an important part of the invoice factoring process - as the exporter signs over ownership of its invoice, allowing it to continue offering attractive delayed payment terms to importers without risking bad debt or being unable to meet its own accounts payable obligations. The importer simply has to amend payment details when paying the invoice, with no further obligations or expectations.

Plus, an NOA is one of only two documents that a client needs to sign to qualify for invoice factoring with Stenn - and this process is fully online, making it easy to apply in just minutes.  

For more information on invoice factoring and the process of applying for finance with Stenn, check out our helpful video .

How will it affect business?

When a notice of assignment has been issued, the invoice factoring company takes control of the debts as a third party, and the previous owner of those debts receives an advance on owed payments quickly.

The significant consideration for any company accessing invoice factoring - and therefore notice of assignment - is the fees associated with the service. Invoice factoring providers buy customer invoices at a slight discount, meaning the client doesn't receive the full invoice amount owed.

No major aspects of the debt change for the owing party, which simply amends the company to which it submits full payment of its accounts payable. However, some stipulations of mispayments may change as may the terms by which repayments can be enforced.

This includes the supplier-buyer relationship, which remains unchanged. Invoice factoring services simply allow the buyer to enjoy longer payment terms while the supplier gets immediate access to liquid capital, which it can invest in improving its offering long-term.

Access invoice factoring with Stenn

Are you engaged in overseas trade with delayed payment terms? Do you need a liquid capital injection to help cover your own accounts payable in the short term or to fund business growth? Simply submit your unpaid invoices for an instant working capital boost.

Stenn finances invoices for hundreds of small and medium-sized importers and exporters with manageable payment terms. And we only require two documents to be signed to qualify for funding, so we don't need to see your credit score.

Apply for financing with Stenn today or find out about the other financing options available to your business in our Resource Hub - including guides to:

• Invoice financing
• Revenue-based financing
• Stock financing
• Business Lines lines of credit
• Alternative lending options for e-commerce businesses

  About the Authors

This article is authored by the Stenn research team and is part of our educational series.

Stenn is the largest and  fastest-growing online platform  for financing small and medium-sized businesses engaged in international trade. It is based in London, provides financing services in 74 countries and is backed by financial giants like  HSBC ,  Barclays ,  Natixis  and many others.

Stenn provides liquid cash to SMEs within the global financial system. On stenn.com you can apply online for  financing and trade credit protection  from  $10 000 to $10 million (USD) . Only  two documents  are required.  No collateral  is needed and  funds are transferred within 48 hours  of approval.

Check the  financing limit available on your deal  or go straight to Stenn's  easy online application form .

Legal information

© Stenn International Ltd. All rights reserved. Any redistribution or reproduction of part or all of the contents in any form is prohibited other than the following:

• You may copy the content to your website page but only if you acknowledge this website as the source of the material and provide a backlink to this article.
• You may not, except with our express written permission, distribute or commercially exploit the content in any other way. 

Disclaimer : The above article has been prepared on the basis of Stenn's understanding of the subject. It is for information only and doesn't constitute advice or recommendation. Whilst every care has been taken in preparing this article, we cannot guarantee that inaccuracies will not occur. Stenn International Ltd. will not be held responsible for any loss, damage or inconvenience caused as a result of anything published above. All those applying for credit should seek professional advice when doing so.

About Stenn

Since 2016, Stenn has powered over $20 billion in financed assets, supported by trusted partners, including Citi Bank, Goldman Sachs, HSBC, and Natixis. Our team of experts specializes in generating agile, tailored financing solutions that help you do business on your terms.

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13 February 2023

Notice of Assignment in Factoring in the U.S

When a business uses invoice factoring, they transfer ownership of its accounts receivable to a factoring company, which then has the responsibility to collect payment for those invoices.

Therefore, a document is issued to alert its customers of this. This is known as a notice of assignment.

Meaning of Notice of Assignment

A notice of assignment is a document that notifies clients that a factoring company has acquired ownership of their accounts receivable, or invoices, from the original business.

The notice's objective is to alert customers to the ownership change and specify who should receive payments.

Importance of Notice of Assignment

A notice of assignment is vital because it officially notifies customers that the ownership of an invoice has changed hands and that they should now direct payments to the factoring company.

The notice helps ensure that payments are sent to the appropriate parties , avoiding misunderstandings and potential conflicts and preventing uncertainty.

In the event of a disagreement, having a detailed and official notice of assignment can safeguard the legal interests of both the company and the factoring company.

Impact of Notice of Assignment on Businesses

The possible impacts faced by businesses by using a factoring company and sending their customers a notice of assignment are:

1. Enhanced customer relationships: By providing clear and official notification to customers of the change in ownership of invoices, a business can help maintain and strengthen its relationship with them.

2. Improved cash flow: By transferring ownership of invoices to a factoring company, a business can receive payment more quickly and improve its overall cash flow.

3. Increased operational efficiency: By using a factoring company to manage the collections process, a business can free up internal resources and focus on its core operations, leading to increased efficiency.

4. Reduced risk: By transferring the responsibility of collecting payment to a factoring company, a business can reduce its exposure to the risk of non-payment and bad debt.

However, before deciding to utilize factoring , it's crucial to consider any potential drawbacks, such as losing control over the collection process and the expense of the factoring service.

Factors Covered in a Notice of Assignment The main sections covered are:

• The company's accounts receivable have been transferred to a third-party financial institution, and payment should now be made to them
• The customer should now send payments to a new address, typically a secure payment processing location
• The customer will be responsible if they make a payment to the wrong address

Information in a Notice of Assignment

In a factoring notice of assignment, the following details are covered to notify the business’ customer about the transfer of ownership of accounts receivable:

• Particulars of the accounts receivable being assigned , including the amount and invoice numbers
• Details of the factor and the client/debtor
• Specifics of the assignment of the accounts receivable, including the effective date and any conditions of the assignment
• Instructions for the customer on how to direct future payments to the factor
• Any other relevant terms and conditions of the factoring agreement

What Happens When an Obligor Doesn’t Receive Notice of Agreement

A business that sells its accounts receivables (invoices) to a third-party factor must send a notice of agreement to its customers.

The purpose of the notice is to inform the customer that the factor has taken ownership of the invoice, and the payments should be made directly to the factor instead of the business.

If the customer does not receive the notice, they may continue to make the payments to the business, leading to confusion, delayed payments to the factor and potential disputes.

In some cases, the customer may have the right to demand a return of the payment made to the factor or stop payment if the notice of assignment was not correctly given.

How to Receive Notice of Agreement

A factoring notice of agreement is typically provided by the factoring company or third-party factor that has purchased the accounts receivable (invoices) from the business.

The notice is usually generated by the factor and given to the business to send to its customers.

The business may also be responsible for ensuring that the notice of assignment is delivered correctly to its customers.

Some factoring companies provide templates or sample notices that the business can use.

Requirements for a Notice of Assignment

To obtain a notice of assignment (NOA) from a factoring company, the following requirements are necessary:

• Monthly revenue of at least $300,000
• A stable financial track record of 1-2 years
• Accurate and trustworthy financial reports
• Effective management of accounts receivable
• No significant financial difficulties

1. Who Sends a Factoring Notice of Assignment? A factoring notice of assignment is typically sent by the business that has sold its accounts receivables or invoices to a third-party factor or factoring company.

The factor usually provides the notice of assignment, and the business may have to sign a factoring agreement with the factor to obtain the notice.

The notice informs the business’ customers that the factor has taken over the ownership of the invoices, and the payments should be made directly to the factoring company instead of the business.

2. How Much Does a Notice of Assignment Cost? The cost for issuing a notice of assignment in factor can differ based on various elements, such as the amount assigned, the state where the assignment is taking place and the particular provisions of the assignment agreement.

This cost may include legal fees, filing paperwork fees and other administrative expenses. It's crucial to examine the assignment agreement thoroughly to determine the precise cost and be aware of any additional fees that may be incurred.

3. How Long Does a Notice of Assignment Take? The duration of issuing a notice of assignment in factoring can differ based on particular circumstances. Usually, the process can take anywhere between a few days to weeks.

The length of the time may be influenced by factors such as the state in which the assignment is getting issued, the complexity of the assignment agreement and the accessibility of relevant parties.

Moreover, the time needed for the notice of assignment may be affected by any legal challenges or hindrances.

4. Does Notice of Assessment Mean You Owe Money? In the United States, a notice of assessment usually implies that you owe money to the government.

However, it is contingent on particular circumstances. The Internal Revenue Service (IRS) sends out the notice of assessment to inform taxpayers of any modification to their tax obligations.

If the notice displays an increase in the amount owed, it implies that the taxpayer has an outstanding balance with the IRS and should pay it promptly to prevent further interest and penalties.

On the other hand, if it shows a decrease in the amount owed, it showcases that the taxpayer has paid more taxes than required and may be eligible for a refund.

It is, therefore, always advisable to thoroughly examine the notice and to get help from a professional.

5. Is Notice of Agreement a Proof of Debt? A notice of agreement alone is not considered proof of a debt. The document merely outlines the terms and conditions agreed upon by the parties involved.

It is not enough evidence to confirm the presence of debt but rather serves as a record of the agreement between the parties.

To establish proof of debt, other financial documents such as receipts, invoices or other documentation may be necessary.

The specific requirements for proving a debt depend upon the type of debt and the laws of the jurisdiction where it is being established.

6. What is a Letter of Release? A letter of release from a factoring company is a declaration that a debt has been satisfied and is no longer the company's responsibility.

In factoring, a business sells its accounts receivable to a factoring company for a fee to receive cash quickly.

Upon receiving the payment on the accounts receivable by the business’ customer, the factoring company issues a letter of release, confirming that the debt has been fully paid off and the company is no longer obligated to it.

The letter serves as proof that the debt has been fully resolved. It can be used to clear the debt from the business's financial records.

The specifics of the letter of release, including the terms and conditions, will depend on the particular factoring agreement and the laws in the jurisdiction where it is formed and drafted.

Siddhi Parekh

Finance manager at drip capital.

Table of Content

• Information in a NOA
• What Happens When an Obligor Doesn’t Receive NOA
• How to Receive NOA
• Requirements for NOA

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• TruckSmarter
• Factoring and invoicing basics

What is a Notice of Assignment (NOA)?

• Updated October 03, 2023 21:41

What is a Notice of Assignment?

The Notice of Assignment (NOA) is a document signed by a factoring company and carrier that informs brokers of the agreement to purchase your receivables. It includes important details like the factoring company's address and banking information, and ensures the broker sends payment to the right place.

When you sign up with new brokers, they will ask for your payment information — please be sure to provide a copy of your NOA. Sending it to them in advance can help avoid delays in the payment process. Please make sure to choose standard 30 day pay with new brokers! 

Many brokers do not frequently update their list of factoring companies, so SmartTrucker may not be an option. If you observe this, simply select “Other". If "Other" is not an option, leave it blank and attach your NOA anyway.

Broker status

Please note that some brokers will not allow SmartTrucker to invoice them until they have confirmed and processed your NOA. To help you with this process, we will send your NOA to the largest brokers on the TruckSmarter Load Board after you sign up for factoring. Lastly, if there are any brokers that you regularly work with but they do not have your NOA, let us know and we can send them your NOA on your behalf. Read more about how to send your NOA to brokers in our Broker status article.

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Notice Of Assignment (NOA)

What is an NOA?

1 (800) 317-4933

WHAT IS A NOTICE OF ASSIGNMENT (NOA)?

If your company is considering accounts receivable factoring, a document known as a "Notice of Assignment" will inform your customers that going forward, you will be working with a factoring company or a bank, who will be managing and collecting your accounts receivable.

You may have concerns about what your customers might think, but you should not be concerned; most businesses are familiar with factoring, and they may be factoring as well.

Factoring has been around for a long time—in fact, for over 4000 years—and has increased significantly and will continue to increase as a result of expanding global markets and the demand for credit.

According to a Global Factoring Market report, analysts predict that factoring will continue to grow by over 10% annually.

EXTENDING CREDIT TO YOUR CUSTOMERS

To remain competitive, most businesses must extend credit terms to their customers, sometimes up to 90 days or longer. What would happen to your cash flow? It can certainly cause problems for your company. However, factoring can solve that concern.

Factoring has become a necessary financial solution for companies to expand and grow their market, as well as maintain a strong cash flow. It is so popular that many of your customers may also be factoring.

Some of your customers may have already contacted you, demanding longer terms on your invoices to help their business, so factoring not only helps your company with an ongoing supply of capital based on sales but also helps your customers by extending longer terms, which ultimately helps their business grow as well.

GO AFTER MORE BUSINESS

Once you are set up with a reliable factoring company, you can go after those bigger contracts, offer longer terms, and maintain a strong cash flow by factoring those invoices.

An NOA is a win-win for you and your customers. For additional information about factoring, please contact  us at any time.

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• Grand Rapids/Muskegon
• Saginaw/Bay City
• All Michigan

Document details NCAA violations that landed Michigan football on probation

• Updated: Jul. 29, 2024, 2:17 p.m.
• | Published: Jul. 29, 2024, 6:57 a.m.

Michigan head coach Jim Harbaugh watches warm ups before the national championship game at NRG Stadium on Monday, Jan. 8, 2024. Neil Blake | MLive.com

• Aaron McMann | [email protected]

The scope of the NCAA investigation into Michigan football for multiple rule violations in 2021 that landed the program under investigation, and later on probation, are now public.

The governing body for collegiate athletics found multiple instances of impermissible contact with football recruits during the pandemic-era dead period, a staffer who engaged in impermissible on-field activities over the course of a season, and alleged then head-coach Jim Harbaugh engaged in “unethical or dishonest conduct and a failure to cooperate.”

The 11-page Notice of Allegations (NOA) was released Friday night by Michigan with redactions after MLive filed a public-records request for the document in December. Other than Harbaugh, it does not name anyone else involved.

In it, the NCAA grouped multiple instances of impermissible contact with three recruits involving unidentified coaches and staff members as part of Allegation No. 1, a Level II violation.

All three of them were granted access to the football facilities during a period in which they were not allowed. One prospective student-athlete and his father met with staffers at a local restaurant and received a discounted meal. They were also provided a free meal at a second restaurant.

Michigan staffers also helped arrange meetings involving a recruit and his father and a current member of the team and a separate recruit at a nearby restaurant.

More: Michigan admits to football recruiting violations, agrees to probation in NCAA probe

Allegation No. 2 found that a redacted staffer, reportedly revealed as former defensive analyst Ryan Osborn, provided “technical or tactical instruction to football student-athletes” was present for on-campus evaluations of 28 prospective student-athletes. Osborn, who committed a Level II violation, departed Michigan after the 2022 season to become defensive coordinator at the University of Charlotte.

The third allegation involves Harbaugh and a potential Level I violation, claiming the former Michigan coach “violated the NCAA principles of ethical conduct and failed to cooperate” during a 2022 interview with investigators regarding the impermissible in-person and off-campus recruiting contact involving his program.

“The factual information establishes (Harbaugh) met with the football prospective student-athletes and their fathers,” the NOA reads.

The NCAA enforcement team believed that hearing panel could find Harbaugh “undermined or threatened the integrity of the NCAA Collegiate Model,” slap him with a Level I violation and issue a show-cause penalty.

Harbaugh later acknowledged Level II violations involving his program but never admitted to lying to NCAA investigators.

Allegation No. 4 involved the staffer who “regularly engaged in impermissible coaching activities in the presence of the assistant football coaches” and contact involving recruits.

The fifth and final allegation tied the first and second allegations together, claiming Michigan “did not a.) effectively deter and/or detect the football program’s impermissible in-person on-campus and off-campus interactions with prospective student-athletes and b.) ensure the football program’s compliance with noncoaching staff member legislation.”

The NCAA concluded that the school failed to monitor itself and reiterated its belief that “compromised the integrity” of the collegiate model.

In April, Michigan struck a negotiated resolution with the NCAA that involved admitting responsibility for the pandemic-era recruiting violations, the staffer who engaged in expanded, impermissible conduct with players and Harbaugh, its head coach, “failed to meet his responsibility to cooperate with the investigation.”

A separate punishment is still being considered for Harbaugh, who left Michigan in January to become the head coach of the NFL’s Los Angeles Chargers and “did not participate in the agreement,” according to the NCAA.

His replacement, Sherrone Moore, was suspended for one game last season as part of a negotiated settlement with the NCAA for his involvement in the recruiting violations.

Michigan is also under a second, separate NCAA probe involving violations pertaining to impermissible in-person, advanced scouting. The Wolverines are 40-3 since 2021, winning three straight Big Ten championships and the College Football Playoff in 2023.

Latest Michigan football news:

• Wolverine recruiting report: The battle for 2025 four-star CB Jayden Sanders
• 2024 Michigan football roster: Jersey, position, weight changes, transfers, freshmen
• Watch Michigan football open preseason camp
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NCAA: Michigan football, former head coach Jim Harbaugh displayed 'dishonest conduct'

The Michigan footbal l program received a Notice of Allegations from the NCAA in December in regards to allegations of impermissible contact with recruits within the department during the COVID-19 dead period in 2021; those details are now public.

An 11-page Notice of Allegations (NOA) was recently released by U-M with a handful of redactions — which removed all staffers named in the NOA other than Jim Harbaugh, as well as specific dates — in response to the Free Press' Freedom of Information Act request in December. The NOA includes examples of impermissible contact with recruits, a staffer who took part in verboten on-field activity and a former head coach who showed "dishonest conduct."

In the NOA, counts 1, 2, 4 and 5 were all deemed by the NCAA to be Level II violations — a mid-level offense. According to the document, the first count involved "members of the football staff (who) provided then football prospective student-athlete 1 access to the football facilities and met with him in the football weight room."

According to the NCAA, staffers then met a second prospective athlete and his father at a local restaurant and that the football program provided a discounted meal. There was another occasion where the same unnamed student-athlete and his father went to meet with staffers "for a cost-free meal at a local restaurant," the investigation found.

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“The enforcement staff believes a hearing panel could conclude that Allegation No. 1 is Level II because the violations (a) were intentional, (b) were not isolated or limited, (c) provided or were intended to provide more than a minimal recruiting or other advantage, (d) involved multiple recruiting violations and (e) compromised the integrity of the NCAA Collegiate Model,” the document reads.

The second allegation involves a staffer, name redacted who supplied “technical or tactical instruction to football student-athletes” and was confirmed to be "present for on-campus evaluations of 28 prospective student-athletes."

According to the NCAA, the staffer "provided false or misleading information regarding his knowledge of and/or involvement in the impermissible in-person on and off-campus recruiting. ... However, the factual information establishes (redacted) met with the football prospective student-athletes and their fathers."

Allegation No. 4 involved a staffer who was found to have “regularly engaged in impermissible coaching activities in the presence of the assistant football coaches”

The fifth allegation connected the dots between the first two allegations. The sport's governing body then determined there was evidence “that the institution did not (a) effectively deter and/or detect the football program's impermissible in-person on-campus and off-campus interactions with prospective student-athletes and (b) ensure the football program's compliance with non-coaching staff member legislation during the 2021 (redacted) period and on-campus evaluation restrictions.”

This is what former coach Jim Harbaugh served his first three-game suspension of 2023, when athletic director Warde Manuel imposed the punishment on his team's head coach. More recently, the Wolverines have been the subject of another NCAA investigation, which centers on an alleged sign-stealing plot that went on for years and was believed to be masterminded by former recruiting staffer Connor Stalions.

As for the third violation, it involves Harbaugh violating "the NCAA principles of ethical conduct and failed to cooperate” when he sat down with investigators for an interview and was deemed to give misleading answers. For this, he was cited with the most serious of offenses by the investigators.

"The violations involved unethical or dishonest conduct and a failure to cooperate, which are presumed Level I and seriously undermined or threatened the integrity of the NCAA Collegiate Mode," the NOA reads.

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Harbaugh left the Wolverines in January just a few weeks after winning the national championship, and it was only a handful of days before Sherrone Moore — who served his own one-game suspension in response to the NCAA's first investigation — took over.

A few months later, in mid-April, the NCAA announced that the Wolverines would be on probation for three years , which included both a fine for the program as well as undisclosed recruiting restrictions, relating to the NOA released to the public Wednesday.

“Today’s joint resolution pertains to the University of Michigan Athletic Department and several former and current employees,” Manuel said in an April release. “We are pleased to reach a resolution on this matter so that our student-athletes and our football program can move forward."