Accounts receivable financing

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Accounts receivable financing

A short-term financing method in which accounts receivable are collateral for cash advances. See: Factoring.

Accounts Receivable Financing

The selling of a firm's accounts receivable to a third party, known as a factor. If a firm is not confident in its ability to collect on its credit sales, it may sell the right to receive payment to the factor at a discount. The factor then assumes the credit risk associated with the accounts receivable. This allows the firm access to working capital immediately, which is important especially if the firm might otherwise have a cash flow problem. The price of accounts receivable financing is determined by the creditworthiness of the firm's customer, not of the firm itself. See also: Debt assignment.
References in periodicals archive ?
For instance, accounts receivable financing is available only to companies with revenues from businesses, government agencies, and/or nonprofits.
Regardless of how you might intend to handle billing, if you're interested in accounts receivable financing you should be as transparent as possible, advises Suskavcevic.
Accounts receivable financing is not a loan; instead, it is viewed as a purchase of the company's invoices.
1st Commercial Credit of El Paso, TX, provides accounts receivable financing in the US, Canada, and the UK and offers export trade financing to clients in every major world market.
About LSQ Funding Founded in 1996, Maitland, Florida-based LSQ Funding Group is one of the country's largest and oldest independently run accounts receivable financing companies.
LSQ provides accounts receivable financing, including factoring and asset based lending, to businesses seeking to access capital and fuel growth.
About LSQ Funding Founded in 1996, LSQ Funding Group is one of the country's largest and oldest independently run accounts receivable financing companies.
Vernon, President, said he wishes to stress the importance of accounts receivable financing as a mechanism for decreasing the current fluctuations in cash flow that IMA is experiencing.
As lending volume continues to be challenged by some traditional lenders we are seeing more and more businesses turning to accounts receivable financing to increase working capital and cash management facilities," continued Richard Laxer.
AHI's healthcare accounts receivable financing program is called the Purchased Accounts Receivable (PAR).

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