Receivables Financing
Receivables Financing is a type of financing where a company uses its accounts receivable as collateral to secure a loan or advance, improving cash flow.
Benefits
Receivables financing uses accounts receivable as collateral to secure funding and improve cash flow.
Frequently Asked Questions
What is receivables financing?
Receivables financing converts outstanding invoices into immediate cash flow by selling them to a third party, helping companies maintain liquidity.
What is the meaning of accounts receivable in finance?
Accounts receivable is the money customers owe to a company for goods or services provided on credit.
Can you use accounts receivable as collateral for a loan?
Yes, companies can use accounts receivable as collateral to secure a loan, providing immediate cash flow.
Key Takeaway
Receivables financing enhances cash flow by using outstanding invoices as security for loans.