Receivables Financing
/ˌriːsɪvəblz ˈfaɪnænsɪŋ/
Definitions
- (n.) A financing method where a company uses its accounts receivable as collateral to obtain funds or credit.
The company secured a loan through receivables financing to improve its cash flow.
- (n.) The sale or assignment of receivables to a third party for immediate cash payment, often at a discount.
Through receivables financing, the business sold its invoices to a factor to meet urgent expenses.
Forms
- receivables financing
Related terms
See also
Commentary
Receivables financing often requires careful attention to perfection of security interests under secured transactions law to protect the lender's rights.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.