Receivables Financing is a mechanism for selling the accounts receivables of a firm at a discount for the purpose of converting it to cash sooner than the designated dates when such accounts receivables become due and demandable. (Eugene Brigham & Joel Houston; 1998, Fundamentals of Financial Management) Pledging of Accounts Receivables Pleading of Accounts Receivables is the act of putting accounts receivables up as security for a loan.
Thursday, March 16, 2017
Receivables financing
Among the established mechanisms that the business sector recourses to in the conduct of transactions is receivables financing. Thanks to receivables financing, there has been increased liquidity in the trading market. This, then, has enabled the trading parties to increase the volume of their transactions, to speed up the turnover period of their investment, and to have the available option of financing additional or new commercial ventures.
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