At Lou's Landscaping Services, a number of customers were not paying up on time, and Lou needed cash for a large purchase. As a result, Lou sold the company's accounts receivable to a finance company for 70 percent of the total collection amount. This method of raising funds is referred to as ______.

Question

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Selling accounts receivable to a finance company for a percentage of the total amount is known as factoring. This is a financial transaction where a business sells its invoices to a third party (factor) at a discount to meet its immediate cash needs.

At Lou's Landscaping Services, a Number of Customers Were Not