Balance Digital Trade Credit Services Terms

Last updated: September 23rd, 2024

These Balance Digital Trade Credit Terms (“Terms”) set out the terms and conditions for the Services provided by Balance Payments, Inc. (“Balance”) related to facilitating merchants’ offering of extended payment terms programs and flexible billing plans to Buyers on their Site or via their internal systems, between Balance, and any merchant owed receivables by those Buyers, Customer or Vendor. These Terms are supplementary to, in the case of Customers, the Balance Online Services Agreement, and, in the case of Vendors, the Balance Vendor Services Agreement (each, as applicable, the “Agreement”), and apply to any use of the Balance Digital Trade Credit Services. For the purposes of these Terms and unless the context otherwise requires, the term “Customer” from here onward refers to any person that uses the relevant Services (including Vendors).

Capitalized terms not specifically defined in these Terms have the meanings given to them in the Agreement including any other service specific terms incorporated by reference therein. To the extent that there is a conflict between the Agreement and these Terms in relation to the use of the Digital Trade Credit Services, these Terms will prevail. Balance may amend these Terms from time to time, in its sole discretion and for any reason. Amendments will be indicated by a changed ‘Last Updated’ date at the top of this web page and the updated Terms will apply to any subsequent use of any Balance Digital Trade Credit Services. Each user is responsible for monitoring this web page for amendments, and a user’s subsequent access and use of the Balance Platform or use of the Services shall constitute its’ consent and agreement to such updates to the Terms without requiring any further actions from Balance; in the event a user is acting on behalf of a Customer, such subsequent access and use shall constitute the Customer’s consent.

Definitions.
“Agreed Percentage” means the percentage of the Invoice Value of a Qualified Receivable that Balance agrees (which shall be in its sole discretion absent any specific agreement to the contrary) to make available to Customer in accordance with these Terms.

“CBA” means the Customer Balance Account, as defined in the Agreement.

“Debtor Relief Laws” means (i) Title 11 of the United States Code (‘the Bankruptcy Code’) and (ii) all other applicable liquidation, conservatorship, bankruptcy, moratorium, arrangement, receivership, insolvency, reorganization, suspension of payments, adjustment of debt, marshaling of assets or similar debtor relief laws of the United States, any state or any foreign country, from time to time, in effect affecting the rights of creditors generally.

“Discount” means, with respect to a Qualified Receivable, the dollar equivalent of the percentage amount of the Invoice Value calculated in accordance with Section 3.1 below, reflecting the difference between the Invoice Value and the Purchase Price.

“Initial Amount” means the amount equivalent to the Agreed Percentage of the Invoice Value less the Discount.

“Invoice” means a singular document evidencing a Receivable created by Customer or on its behalf and provided to a Buyer and containing details acceptable to Balance.

“Invoice Value” means the net amount of an Invoice after all discounts, credits, rebates provided by the Customer to the relevant Buyer for such Invoice.

“Proceeding” means any suit in equity, action at law or other judicial or administrative proceeding.

“Purchase Price” means an amount equal to the Invoice Value less the Discount.

“Purchased Receivable” means a Qualified Receivable that Balance has purchased from Customer.

“Purchase Limit” means the maximum value of Receivables payable to the Customer by a specific Buyer at any one time and which Balance may be willing to purchase from the Customer.

“Qualified Buyer” means a Buyer of Customer which was submitted to Balance by Customer as the subject matter of a review procedure defined by Balance in its sole discretion for approving a Buyer for the option of having Receivables owed by such Buyer to Customer to be purchased by Balance, and which following such review was approved by Balance to have Receivables owed by such Buyer to be submitted to Balance in a request to be Purchased Receivables.

“Qualified Receivable” means a Receivable which satisfies the criteria set forth in Section 4.

“Receivable” means an amount owed to Customer by the relevant Buyer for services that have been fully rendered or products that have been delivered to Buyer by Customer or a third party acting on behalf of Customer.

“Receivables Issue” means the occurrence of any of the following:

(i) any non-payment or untimely payment on a Purchased Receivable relating to an act of fraud, deceit, malpractice or other abuse of the Services;

(ii) any cancellation, return, complaint or dispute that arises between the relevant Buyer and Customer;

(iii) any dispute related to a Purchased Receivable;

(iv) any other known breach of warranty or default in Customer’s covenants and agreements or any breach of the representations contained in Section 4;

(v) any Proceeding arising related to a Purchased Receivable or involving a dispute between Customer and Buyer;

(vi) any instance in which no buyer pays on a Purchased Receivable that is related to Customer’s conduct or breach of any of the provisions of the Agreement.

“Remaining Amount" means, with respect to a Qualified Receivable, the Purchase Price less the Initial Amount and less the Adjustment Amount (as defined in Section 3.1 below).
‍
DIGITAL TRADE CREDIT SERVICES

Balance provides functionalities within the Balance Platform for Customers who offer Buyers trade credit, to manage their accounts receivables ‘Days Sales Outstanding’ (“DSO”) risks, by utilizing risk assessment, advanced payments, and other features by permitting the optional sale of certain Receivables by Customer to Balance and their Purchase by Balance from Customer (also referred to in some Agreements as the “Balance Receivables Purchase Services”).
‍
1. Risk Assessments. The Digital Trade Credit Services may include performing assessments on the creditworthiness of Customers or Users for which Balance may review any factors considered relevant by Balance, and any information requested by Balance and being provided to it. These may include, for example (and not by way of limitation), the information available to Balance in relation to a Receivable or any of the parties involved thereto, the financial condition of a party’s business, its ability to meet its obligations, including in relation to a Receivable and these Terms, market and macro-economic factors, the condition of Balance's business, as well as the underlying purpose of any transaction. In accordance with the aforementioned, and subject to the terms of the Order Form, Balance will calculate the applicable Discount for the purchase of any Receivable.
  ‍
2. Balance will only agree to purchase Receivables duly owed to Customer by Qualified Buyers. Balance may enable a procedure to qualify Buyers in advance or as part of a Buyer’s checkout in a specific transaction with the Customer using the Services.
  ‍
3. Balance may also require Customer or the operator of the Site to procure such documents as may reasonably be required by Balance from a Buyer in relation to the Buyer’s application for trade credit within any payment program or billing plan.
  ‍
4. If elected by Customer or the operator of the Site to implement such risk assessment capabilities to assess creditworthiness of Users in advance of any specific transaction performed by any such User, for which Customer is looking to manage the DSO risk, or assess credit limits for Buyers participating in its payment programs and billing plans (whether for the Site in general, or per Vendor), or to display such credit limits to Users of such programs and plans, then:
  ‍
  1. Merely as a business convenience to Customer, and without being construed as a commitment or promise or obligation of any kind, or a derogation of any rights available to Balance, Balance may display a Purchase Limit for any Qualified Buyer. While Balance’s normal practice is to not change the Purchase Limit for 90 days, Balance reserves the right at its sole discretion to adjust (including up to zero) the Purchase Limit at any time and for any reason without notice. Balance shall not be under any obligation to purchase any Receivables and reserves the right to decline to purchase a Receivable which Customer has offered or will offer, and to rescind an offer to purchase a Receivable, for any reason.
    ‍
  2. Customer may only utilize the risk assessment capabilities as aforementioned with respect to Users which Customer intends in good faith to submit all of their Receivables during the Term to Balance in a request to be Purchased Receivables, and shall not implement any steps/ procedures believed by Customer to be adverse to the interests of Balance in identifying and/or selecting Receivables to be purchased by Balance.
5. Advanced Payments. If implemented by Customer or the operator of the Site, the Digital Trade Credit Services may include the possibility for Customers to receive funds in connection to their account receivables prior to receiving payment from the Buyer for such receivables.
  ‍
  1. Subject to these Terms, Customer may receive the Initial Amount for a Qualified Receivable from Balance prior to the due date according to the payment terms stated on the Invoice for such Receivable by selling such Qualified Receivable to Balance; however, unless otherwise specifically agreed to by Balance in writing, Balance will only make the Initial Amount available to Customer upon the later of (i) the delivery of the underlying goods and services to Buyer or (ii) the expiration of the time period during which Buyer may reject or return the goods and services.
    ‍
  2. Upon receipt of the payment by Balance of the Invoice Value, and if applicable, Balance will deposit any available Remaining Amount to the CBA, less any processing fees applicable to the Transaction.
6. DSO Ageing Optimization. If implemented by Customer or the operator of the Site, the Digital Trade Credit Services may include functionality for Customers to receive funds in connection to their account receivables without being fully dependent on the actual payment for such receivables by the relevant Buyer by selling a Qualified Receivable to Balance on or before the due date for such Receivable. In such instances, subject to these Terms and provided that no Receivables Issue has occurred, Balance will pay the Purchase Price or the Initial Amount to Customer on the anticipated due date for the Qualified Receivable.
  ‍
7. Automation. Balance may automate certain or all aspects of the purchase, transfer, and sale of Receivables through pre-defined programmatic-based rules as can be found in the Balance Documentation and which Balance may change from time to time in its discretion and without notice.
  ‍
8. Right of First Refusal. Balance shall have a right of first refusal with respect to any Receivable and Customer agrees it will not sell, or offer for sale, any Receivable to any Person without first providing Balance with a two (2) business day (in both New York and Tel Aviv) period during which Balance may elect to purchase the Receivable. Additionally, Customer hereby agrees that it will only submit such Buyers for assessment by Balance if it has a good-faith intention to subsequently offer the corresponding Receivables to Balance for purchase; Balance may, at its discretion, decline to perform an assessment on a Buyer. Balance may execute its right to purchase a Receivable via the procedure described in Section 3 below.
  ‍
9. Discretion. Notwithstanding anything to the contrary, Balance, in its sole and absolute discretion, will determine whether or not to purchase a Receivable, and Balance will under no circumstances be liable to Customer for Balance’s failure or refusal to purchase a Receivable or any portion thereof.
Customer Receivables.
1. Sale and Purchase Process. The purchase and sale of Receivables will occur as follows:
  ‍
  1. A Receivable offered by Customer to Balance for purchase may be dependent on a review by Balance of such factors as it considers appropriate. Balance will indicate its acceptance of an offer to purchase a Qualified Receivable at the Purchase Price by (i) either indicating a future date on which it will credit the Initial Amount or the Purchase Price to the CBA via the Balance Dashboard or Balance APIs, or, (ii) crediting the Initial Amount to the Customer’s CBA (“Acceptance Action"). Customer will also bear all payment processing fees applicable to the Receivable based on the payment method elected by the Buyer. Upon the occurrence of an Acceptance Action, Balance and Customer will be deemed to have completed the sale, assignment and transfer of all of Customer’s right, title and interest in and to the subject Qualified Receivable to Balance as its absolute owner, in accordance with and subject to these Terms. EACH OF CUSTOMER AND BALANCE SHALL, AT ALL TIMES (INCLUDING FOR FEDERAL, STATE AND LOCAL INCOME TAX PURPOSES), TREAT THE PURCHASE OF RECEIVABLES BY BALANCE AS A PURCHASE BY BALANCE AND A SALE BY CUSTOMER AND NOT AS A LOAN.
    ‍
  2. Purchase Price Adjustment: In the event that the relevant Buyer pays for the Receivable purchased by Balance at a time beyond the payment terms stated on the Invoice for such Receivable, and subject to permissibility under applicable law, the Purchase Price will be reduced by the daily pro-rata equivalent of the Discount + 1% for each additional day, up to a maximum of an additional 120 days, that the Buyer does not pay the Qualified Receivable when originally due(such amount so reduced being the “Adjustment Amount”). The Adjustment Amount will not exceed the maximum amount permitted by applicable law or the Remaining Amount of a Qualified Receivable. If a relevant Buyer does not pay for a corresponding Qualified Receivable or if there is no Remaining Amount based on the specific implementation of the Services, Customer will not be required to return the Initial Amount to Balance.
    
    Illustration:
    
    If the Invoice Value was $100, the extended payment terms approved were Net 60, the Agreed Percentage was 80%, the Discount was 5$ (so the Discount rate was 2.5% per 30 days), the calculations of the Adjusted Amount, and the Remaining Amount payable to Customer by Balance, would be as follows.
    
    Purchase Price will be $100 - $5 = $95
    Initial Amount will be $80 - $5 = $75
    If Buyer pays on time -
    Adjusted Amount = (({[(2.5% + 1%) x $100] / 30} x (60 - 60) = 3.5$ / 30 x 0 = $0
    Remaining Amount = $20 - $0 = $20
    If Buyer pays on day 70 -
    Adjusted Amount = {[(2.5% + 1%) x $100] / 30} x (70 - 60) = (3.5$ / 30) x 10 = $1.17 (rounded up)
    Remaining Amount = $20 - $1.17 = $18.83
    If Buyer doesn’t pay by day 180 -
    Adjusted Amount = {[(2.5% + 1%) x $100] / 30} x (180 - 60) = (3.5$ / 30) x 120 = $14
    Remaining Amount = $20 - $14 = $6
    ‍
  3. Customer will transfer or provide to Balance, upon request, the specific Invoice delivered to Buyer with respect to a Purchased Receivable. Balance may require that each Invoice in respect of a Purchased Receivable states in a manner satisfactory to Balance that payment for such Invoice shall be made to Balance or as otherwise specified by Balance. Customer shall maintain complete and accurate books and records related to the Purchased Receivables, including copies of Invoices and shipping receipts. Such records should reflect the sale of the Purchased Receivables to Balance and Balance's ownership of the Purchased Receivables and Customer will promptly provide such books and records to Balance upon request and make them available (with 2 business day prior notice) for inspection at its office by Balance (or any person acting on its behalf).
    ‍
  4. Following Balance’s purchase of a Purchased Receivable, Customer will (i) not be entitled to collect or receive any amount in connection with such Qualified Receivable, (ii) hold the entirety of any payment on such Purchased Receivable which may come into Customer’s possession or control (even if such payment is payable to Customer) in trust for the benefit of Balance, and promptly deliver to Balance all such payments (and endorse any payment which is payable to Customer), and (iii) not hinder, delay or interfere with any payment of such Purchased Receivable or any terms thereof or take any actions to discourage Balance from receiving any such payment; (iv) comply with, and do all things necessary or desirable to cause all other parties to the Purchased Receivable to comply with, the terms of the underlying governing contract/ arrangement giving rise to the Purchased Receivable. Customer will immediately inform Balance of any inquiries, complaints, correspondence or other communications from any Buyer or third party regarding any aspect of a Purchased Receivable or Invoice. Balance reserves the right to instruct Customer regarding how to respond to the inquiry or to assume control for responding to it.
    ‍
  5. Any funds received from a Buyer with respect to a Receivable will first be attributable to any Purchased Receivables until Balance has received all amounts due to it, and not on a first-in-first-out basis for all Receivables. Only once Balance receives all amounts due to it will any funds received from Buyer with respect to a Receivable be payable to Customer, including for the Remaining Amount of any Qualified Receivable. A breach of this provision will constitute a material breach of these Terms.
    ‍
  6. Balance may purchase a Receivable either on its own or in concert with a third party chosen by Balance.
Customer’s Representations and Warranties. Customer warrants, represents, covenants and agrees that, with respect to each Receivable Customer requests or agrees to sell to Balance:
‍
(a) the goods and services underlying the Purchased Receivable have been fully delivered or rendered to the relevant Buyer unless Balance has expressly waived this requirement, either in writing, or in the implementation of the Service;

(b) such Receivable is owed by a Qualified Buyer;

(c) such Receivable is evidenced by an Invoice that (i) is complete and accurate in all respects, (ii) has been issued, delivered to and received by Buyer, (iii) no other invoice or document evidencing the Purchased Receivable has been provided to the relevant Buyer other than the Invoice, which was created or sent by Balance on Customer’s behalf or provided to Balance by Customer, and (iv) bears the details required by Balance for payment of the Invoice to it by Buyer; and

(d) such Receivable has not been outstanding for more than sixty (60) days from the date on which the Invoice was first issued for the Receivable, is valid and owing pursuant to all contracts, terms, and agreements to which Customer is a party, including Customer’s agreement with the relevant Buyer, which may not be modified or amended without Balance’s prior written consent;

(e) the terms and conditions of such Receivable have not been waived, altered, modified or amended in any respect following the Receivable’s origination;

(f) (i) the Receivable is not contingent in any respect for any reason and constitutes a legal, valid, binding and unconditional payment obligation of the applicable Buyer, is fully enforceable against such Buyer for the amount of the Receivable, and is not subject to any defense, counterclaim, recoupment, discount, adjustment or right of setoff or rescission, except to the extent that enforceability may be limited by Debtor Relief Laws and general principles of equity, (ii) there are no conditions precedent to the enforceability or validity of the Receivable that have not been satisfied or waived, (iii) Buyer owing such Receivable has no bona fide claim against Customer; (iv) the Receivable is not and will not be subject to dispute between the relevant Buyer and Customer, including with respect to the cost or quality of services rendered or products sold, and (v) there are no Proceedings existing, pending or, to the knowledge of Customer, threatened against or affecting Customer, which materially and adversely affects or could affect the validity or enforceability of such Receivable;

(g) the transfer of such Receivable from Customer to Balance complies with Applicable Law, Balance is not a lender and the purchase of Receivables is not a loan, and such Receivable has not been originated in, and, as of any date of determination, is not subject to the laws of, any jurisdiction under which the sale, transfer, assignment, setting over, conveyance or pledge of such Receivable would be unlawful, void or voidable;

(h) immediately prior to the sale of the Receivable to Balance, Customer is the sole owner of such Receivable and has good and marketable title to the Receivable, and has the right to assign, sell and transfer such Receivable to Balance free and clear of any lien, pledge, charge, claim, security interest or other encumbrance, and Customer has not sold, assigned or otherwise transferred or conveyed any right or interest in or to such Receivable, has not pledged such Receivable as collateral for any debt or other purpose, nor has Customer authorized the filing of, or aware of the filing of, any financing statements against Customer that include a description of collateral covering any portion of such Receivable;

(i) upon purchase by Balance: (i) each Purchased Receivable becomes the sole property of Balance, (ii) Customer’s sale and assignment of such Purchased Receivables shall pass legal and equitable title in the Receivable to Balance free and clear of liens, claims and encumbrances without any further actions required from Balance, and (iii) Balance will have the right to assign, sell, transfer and pledge such Receivable to any person without limitation;

(k) no consents or approvals are required by the terms of such Receivable or otherwise for the consummation of the sale, transfer or assignment of such Receivable or the rights and duties of the holder of the Receivable, and such Receivable is not subject to any restriction on the ability of the holder of the Receivable to exercise its rights;

(l) such Receivable is not and will not become subject to a defense or claim in recoupment or setoff asserted against Balance;

(m) payments on such Receivable are payable to Customer;
‍
(n) such Receivable and the relevant Buyer are not subject to or restricted by any receivership, insolvency or bankruptcy proceeding;
‍
(o) Customer has not received any notice of (i) actual or imminent bankruptcy insolvency or material impairment of the financial condition of the relevant Buyer or (ii) actual or threatened litigation regarding the validity or enforceability of such Receivable;
‍
(p) to the knowledge of Customer after due enquiry, Customer, on the one hand, and the applicable Buyer, on the other hand, are not engaged in any litigation, mediation, or arbitration whatsoever with respect to each other, and neither has threatened the other in writing with any litigation, mediation, or arbitration;

(q) the Receivable constitutes an “account”, a “payment intangible” or proceeds thereof and is not an “instrument”, “chattel paper” or “electronic chattel paper” (each such term as defined in the Uniform Commercial Code as in effect, from time to time, in each applicable jurisdiction); and

The warranties and representations set forth in this Section 4 apply as of the date each Receivable is sold and continue with respect to each Purchased Receivable until each Purchased Receivable is fully paid by Buyer.
‍
Receivables Issues. Customer agrees that upon the occurrence of any Receivables Issue, Customer will (a) immediately inform Balance of such Receivables Issue, and (b) fully and promptly cooperate with Balance in investigating the Receivables Issue, in order to ensure that Buyer will pay Balance the full amount due for the relevant Receivable. After enquiry and unless Balance determines, in its sole discretion, that the Customer has no responsibility for the Receivables Issue, Balance will have the right to cancel the purchase of such Receivable, return it to Customer and be refunded by Customer the full sum equal to the Agreed Percentage of the Invoice Value of such Purchased Receivable, which shall be due and payable immediately, on demand by Balance (“Repurchase Obligation”). The cancellation, return and refund of the purchase of such Receivable may incur fees to be paid by Customer, and Customer shall be responsible for all such fees. Balance shall also have the right, at its discretion, to offer a revised Purchase Price for such receivable, which if not accepted to the Customer, will trigger the Repurchase Obligation. Customer may not resolve a Receivables Issue by agreeing to accept an amount less than the Invoice Amount, unless Balance provides prior written consent. A breach of the Repurchase Obligation shall also constitute a material breach of the Agreement.
‍
Customer’s Required Notice to Balance. Customer will immediately notify Balance of: (a) any dispute related to a Purchased Receivable, (b) any other known breach of warranty or default in Customer’s covenants and agreements or change regarding representations set forth in Section 3, (c) Customer’s discovery of evidence of insolvency of a Buyer whose Receivable is a Purchased Receivable, or (d) any Proceeding related to a Purchased Receivable or involving a dispute between Customer and Buyer.
‍
Power of Attorney. Customer makes, constitutes and appoints Balance as Customer’s true and lawful attorney-in-fact with power of substitution and with power and authority to:

(a) endorse the name of Customer or of any of its Representatives upon any notes, checks, drafts, money orders, or other instruments of payment as required to enforce Balance’s rights with respect to Purchased Receivables;

(b) sign and endorse the name of Customer or any of its agents upon any Invoice, drafts against Buyers, assignments, verifications, demands under letters of credit and notices in connection with Purchased Receivables;

(c) communicate directly with Buyers to verify the amount and validity of any Purchased Receivable, to collect payment, and to resolve disputes, including executing any agreement compromising and settling any dispute arising out of the Purchased Receivables;

(d) bring suit to collect any Purchased Receivable;
‍
(e) amend the terms of any Purchased Receivable;

(f) execute any financing statements (including amendments) to perfect Balance’s security interest in the Purchased Receivables; and

Customer’s attorney-in-fact, Balance (acting itself, or through an agent), is hereby granted full power to do all necessary things to accomplish the above as fully and effectively as could Customer. Customer ratifies all that the attorney-in-fact shall lawfully do or cause to be done by virtue hereof. The power of attorney shall be irrevocable until Balance has irrevocably received all payments to which Balance is or may be entitled from Customer and Buyers for Purchased Receivables. Nothing in this Section 7 restricts Balance from transferring its power of attorney and other rights to Purchased Receivables to a third party.
‍
Set Off. In addition to any rights and remedies provided or available to Balance by these Terms, the Agreement and by law, Balance shall have the right in its sole discretion, without prior notice to Customer (any such notice being expressly waived by Customer to the extent permitted by applicable law) to recoup, set off or otherwise credit against the Purchase Price or other amounts payable by Balance or its affiliates to Customer all present and future amounts owed by Customer to Balance or its affiliates, whether arising from these Terms or any other transaction between Balance and Customer or its affiliates, and whether or not related to these Terms.