Accounts receivable represent an undesirable form of collateral from the lender's point of view because they are often illiquid.

Question

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Accounts receivable can actually be a desirable form of collateral because they represent money owed to the borrower by their customers. However, they can be difficult to value and collect in a timely manner, which can make them less desirable to some lenders.

Accounts Receivable Represent an Undesirable Form of Collateral from the Lender's