A company pledging its inventory, accounts receivables, or fixtures as collateral for a loan is using ________.
A)floor planning
B)asset-based financing
C)trade credit
D)margin loan

Question

Quizplus · Accepted Answer

The practice of pledging a company's assets, such as inventory or accounts receivables, as collateral for a loan is known as asset-based financing. This type of financing can provide access to capital for businesses that may not have strong credit ratings, and the lender is secured by the assets in case the business is unable to repay the loan. Choices A, C, and D are not the correct answer as they refer to different types of financing or credit arrangements.

A Company Pledging Its Inventory, Accounts Receivables, or Fixtures as Collateral