These were offset by a $5.4 million prepayment penalty (cash received) related to early termination of mortgages and a $1.2 million recovery related to provisions for uncollectible mortgages, notes and straight-line receivables.
For example, total debt, cash plus interest-bearing securities and accounts receivables must each be less than 33% of the trailing 12-month average capitalization.
A non-asset-based line of credit will have a credit limit set on account opening by the accounts receivables size, to ensure that it is used for the correct purpose.
As the factoring business expanded, it was done in bulk with contractually obligated clients selling their receivables by assignment to the factoring company.