Accounts receivable financing - Definition

A financing system where the company sells its accounts receivables at a discount. The company receives an Amount at a discounted value of the receivables. The age of the receivables affect the amount a company will receive. Older the receivables lesser will be the finance. A firm either sells its receivables when it is not confident of collecting or when it feels the discounted finance is more than the cost of collecting the debt. The Risk associated with the accounts receivables automatically gets transferred to the financing company.

Terms near "Accounts receivable financing "

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Accrual Swap