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.
About LSQ Funding Founded in 1996, LSQ Funding Group is one of the country's largest and oldest independently run accounts receivable financing companies.
Technically, there is a difference between accounts receivable financing, where you get a loan that's secured by paper you're holding, and "factoring," in which you sell your receivables at a discount.
Together we'll strengthen our accounts receivable financing programs for staffing companies, offering them a strong financial solution to meet their capital needs.
The Receivables Exchange is transforming and expanding the accounts receivable financing industry as the smart, easy and efficient way for small and medium sized companies to gain quick access to working capital.
The proceeds from the issuance of the CERC notes will be used to repay a portion of the $375 million of advances under CERC's accounts receivable financing facility.
GFSI) offers a fully featured strategic product suite that provides core data processing, item processing and check imaging, ACH origination and processing, remote check capture and deposit processing, accounts receivable financing solutions, a teller automation system, turn-key leasing solutions, financial institution website design and hosting and retail inventory management services.

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