What Are Put Options?
A Put Option applies to a particular account of a vendor, not its entire receivable portfolio.
The duration of a Put Option is also flexible; a Put Option can be structured to cover a period as short as 3 months or as long as 5 years.
Unlike trade insurance and factoring agreements, a Put Option cannot be canceled or modified by the provider to drop or limit coverage.
The confidentiality of a Put Option allows a vendor to continue to supply and thereby, support its customers without increasing its risk exposure.
There are no surprises or hidden fees. Just the tailored protection you need—and the peace of mind that comes with it.
In some cases a Put Option can cover for slow pay/protracted default and works in progress
There are basically two types of Put Options: Pre-Bankruptcy Put Options and Post-Bankruptcy Put Options
A Pre-Bankruptcy Put Option is a right to sell a claim against a company that could file for bankruptcy protection.
A Post-Bankruptcy Put Option is a right to sell a claim against a company that is operating under bankruptcy protection and that could wind down and liquidate.