How to Get Your Contractor's Consent for the Assignment of Receivables in Factoring

In theory, factoring looks simple. You submit an application, receive the terms, activate the limit and finance your invoices. In practice, however, the process very often stops at one specific point: the contractor's consent to the assignment of receivables.

This is the stage at which many companies lose time, momentum and patience. Not because factoring itself stops making sense. It is simply that, on the contractor's side, resistance, uncertainty or delayed decision-making may appear. For the applicant, it looks like a blockage. For the other side, it is often a topic that has never been clearly explained before.

The good news is that a lack of consent does not always mean a definitive "no". Very often it means: "we do not know what this changes for us", "we need to check this internally" or "we do not have a ready process for this right now". That is why the topic of assignment should be handled calmly, technically and step by step.

What is the assignment of receivables in factoring?

Assignment of receivables means transferring the right to demand payment from the creditor to a third party. Under the Polish Civil Code, the general rule is simple: a creditor may transfer a receivable without the debtor's consent, unless this is prohibited by law, a contractual provision or the nature of the obligation. The rights connected with the receivable are also transferred together with it.

In factoring practice, this means that the factor finances your invoice, while the contractor makes payment to the account indicated under the assignment. This does not change the price, delivery date, scope of cooperation or any other commercial arrangements. What changes is mainly the formal handling of the receivable and the payment direction.

This is important because this very element is often the source of the biggest resistance. Not the idea of financing itself, but the technical and legal change on the payment side.

Open assignment and silent assignment - what does this change in practice?

Two concepts most often appear in conversations about factoring: open assignment and silent assignment.

Open assignment means that the contractor knows about the financing and is informed that payment for the invoice should be made in accordance with the assignment. This is the most transparent operational model because each party knows what the payment path looks like.

Silent assignment works differently. The contractor is not formally informed about the financing itself, and the payment still goes first to the supplier, who then settles with the factor. This model exists, but it is usually more selective, more difficult operationally and not always available.

From the entrepreneur's perspective, the most important thing is this: if you are discussing standard B2B factoring, you will much more often work with open assignment. This means that communication with the contractor should be treated as part of the process, not as a problem that will "somehow solve itself".

When is the contractor's consent really needed?

This is one of the most important points in the whole topic.

As a rule, the assignment of receivables does not require the debtor's consent, but only if nothing prevents it. If the agreement contains a non-assignment clause, the situation becomes more complicated.

The Civil Code also indicates that if a receivable is confirmed in writing, a contractual prohibition on assignment is effective against the buyer only if the document includes a reference to that restriction, unless the buyer knew about the prohibition at the time of assignment.

In practice, this means that the topic of the contractor's consent most often appears in one of two situations:

• the contractor must be formally informed about the assignment and the payment path needs to be organised,
• or the agreement contains a provision restricting the assignment of receivables, and without the other party's consent the process cannot be safely completed.

Why does the contractor not want to consent to the assignment?

The biggest mistake at this stage is assuming that the contractor refuses because they do not want to cooperate. In practice, it is most often about one of several fairly predictable reasons.

The first is operational inconvenience. Someone has to change payment details, enter information into the system, pass the topic to accounting or procurement. For the contractor, this is additional work, so it is easy to postpone it "for later".

The second is interpretational concern. Some companies still see factoring as a sign of liquidity problems rather than a cash flow management tool. If no one explains this calmly, caution appears on the other side.

The third is a non-assignment clause. If such a provision exists, the matter stops being purely operational and requires a more formal approach.

The fourth is the internal approval path. In larger organisations, consent to an assignment very rarely depends on one person. The topic goes to finance, legal, procurement or several people at the same time. Then the biggest problem is not factoring itself, but the fact that the case becomes diluted between departments.

How to get your contractor's consent to the assignment of receivables step by step

A gradual approach works best. Do not start with pressure. Start by organising the process.

1. Send a simple message and a ready-made document

The first step should be as simple as possible. The contractor should receive:

• a short explanation of what the request concerns,
• information on what changes and what remains unchanged,
• a ready-to-sign document,
• contact details for the person who can answer questions.

At this stage, you do not need to explain the whole theory of assignment. It is enough to calmly explain that the purpose is to activate financing, that the commercial terms of cooperation remain unchanged, and that only the technical handling of the payment changes.

This is where many cases can be closed quickly. Very often, the problem is not the lack of consent as such, but the lack of a simple material that someone on the contractor's side can forward internally.

2. Explanation letter for the contractor's CFO or controller

If the topic gets stuck after the first email, it usually means that the matter has moved higher and someone on the finance side needs broader context.

Then it is worth adding a short explanation:

• factoring does not change the commercial terms,
• the assignment concerns only payment settlement,
• you want to organise the process, not change the business relationship,
• you are ready to answer operational questions.

At this stage, the goal is not to "sell factoring" to the contractor. The goal is to reduce uncertainty.

3. Suggest a three-party call

If email communication does not work, a short call can be very effective: you, the contractor and a representative of the factor.

This is a good solution especially for larger amounts, more important relationships or situations where operational questions appear on the contractor's side and are difficult to close in a few messages.

Such a call often shortens the process more than another week of correspondence because it allows questions about payments, procedure, operational contact and the scope of changes to be answered immediately.

4. If full consent is too difficult, start with one invoice

If the contractor does not want to agree to a broader assignment right away, sometimes it is more reasonable to narrow the topic. Instead of asking for a wider opening of the whole relationship, you can ask for the assignment of one specific invoice or one specific transaction.

This does not solve the problem permanently, but it often works as a first step. For the contractor, it is a smaller change. For you, it is a chance to activate financing and show that the process works calmly.

5. Clause for a new agreement - prevent the problem during renegotiation

If cooperation with a given contractor is expected to be long-term, it is worth drawing conclusions. When signing a new agreement or renegotiating an existing one, it is good to raise the topic of assignment of receivables immediately and include a provision allowing assignment to factoring institutions after prior notification.

This is the simplest way to make sure the same problem does not return with every next invoice.

What to do if the contractor still refuses the assignment of receivables?

Sometimes, despite all attempts, consent will not be given. In that case, the worst thing you can do is get stuck.

In practice, you usually have three reasonable paths:

• look for another form of financing that is not based on the assignment of receivables,
• activate factoring for another contractor, if you have a broader customer portfolio,
• return to the topic during contract renegotiation, when you have more room to negotiate.

This will not always be the ideal solution, but it is often better than giving up financing entirely just because one relationship turned out to be more difficult formally or operationally.

When is it better to choose another financing path?

Not every situation is suitable for long discussions about assignment.

If:

• you need funds quickly,
• the contractor is strategic but very rigid procedurally,
• you know that obtaining consent will take weeks,
• or you have other sources of financing security,

then sometimes it is more reasonable to consider another path. For example, bridge financing, a business loan or financing based on a model other than classic assignment of receivables.

This does not mean that factoring stops making sense. It only means that, at a given moment, speed and feasibility may be more important than the ideal financing structure.

How to talk to the contractor without damaging the relationship

The most important rule is this: do not put the contractor in the position of a party that is "blocking your business". This usually only escalates the situation.

A calm, technical language works much better:

• we want to organise the payment handling,
• the terms of cooperation remain unchanged,
• we care about an efficient process on both sides,
• we are sending a ready-made document and are available if any questions arise.

The less tension there is in communication, the greater the chance that the other side will treat the topic as operational rather than conflict-based.

Summary

A lack of contractor consent to the assignment of receivables does not have to mean the end of the factoring conversation. In many cases, it is not about real opposition to financing, but about the lack of a simple process, uncertainty on the contractor's side or a contractual provision that no one has previously worked through properly.

That is why, instead of treating refusal as a definitive "no", it is better to treat it as a signal that the action path needs to be organised. Sometimes a ready-made document and a short email are enough. Sometimes a conversation with the contractor's finance team is needed. Sometimes you need to start with one invoice or return to the topic during contract renegotiation.

The most important thing is not to start with chaos. The simpler and calmer the process, the greater the chance that consent to assignment will stop being a blockage and become just another step towards activating financing.