Accounts Receivable Financing

The term “accounts receivable financing” denotes the practice of selling accounts receivable to a third-party service provider.

This term is synonymous with the term “factoring”.

In accounts receivable financing, invoices and other accounts receivable are sold to third-party service providers at discounted rates in order to raise immediate cash. The third party service provider then collects the accounts receivable at their full face value.

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