A commercial finance company typically purchases the accounts receivable outright and assumes all credit risks.

Question

Quizplus · Accepted Answer

A commercial finance company may provide financing by advancing funds based on accounts receivable, but it usually does not purchase them outright. Instead, it uses them as collateral, and the original company often remains responsible for the credit risk unless factoring is specifically involved.

A Commercial Finance Company Typically Purchases the Accounts Receivable Outright