Assignment release

Written release or termination of assignment after obligations are satisfied.

Why it matters

An assignment release is necessary to clear the factor claim on receivables after the factoring relationship ends. Without it, the UCC-1 filing remains active and will appear in lien searches conducted by future lenders or business partners. A release confirms the factor no longer holds assignment rights on specific receivables or all receivables under the program. The timing of the release matters: most factoring agreements require the factor to file a UCC-3 termination within a specified number of days after all obligations are settled, but enforcement depends on whether the seller tracks follow-through.

How it appears in contracts

In a factoring agreement, the assignment release is triggered when all funded invoices are collected, all fees are paid, and no outstanding chargebacks or disputes remain. The agreement should specify the timeframe for the factor to provide a written release and file the UCC-3 termination, typically 10 to 30 days after final settlement. Under UCC Section 9-513, if the factor fails to file within 20 days of a written demand, the seller may file a termination directly with the relevant state filing office. Sellers should request written confirmation that the UCC-3 has been filed and verify the termination independently.

Related terms

Related article: How invoice factoring works

Related reading

Sources

  • International Factoring Association - International Factoring Association. Accessed 2026-05-19. Industry association source for factoring terminology and industry context.
  • Secured Finance Network - Secured Finance Network. Accessed 2026-05-19. Industry education source for secured finance and asset-based lending context.
Financial disclaimer. This page is educational only and is not financial, legal, tax, accounting, or credit advice. Factoring terms vary by provider and contract. Read the full disclaimer.