The sale of receivables by a business

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Selling receivables is a form of factoring, which involves the sale of accounts receivable to a third-party, typically a financial institution, in exchange for immediate cash. This allows the business to generate cash quickly and improve its liquidity position without taking on additional debt. It does not necessarily indicate financial difficulty or mean that the business is owned by a finance company. It may or may not be a significant revenue item on the income statement, depending on the nature and volume of the business's receivables.

The Sale of Receivables by a Business