When accounts receivables are used as collateral, the process is called factoring accounts receivable.

Name: When accounts receivables are used as collateral, the process is called factoring accounts receivable.
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When accounts receivables are used as collateral, the process is typically referred to as accounts receivable financing or pledging accounts receivable. Factoring accounts receivable involves selling the receivables to a third party (the factor) at a discount.

When Accounts Receivables Are Used as Collateral, the Process Is