Accounts receivable financing entails a bank actually taking over the ownership of receivables,whereas factoring entails a bank merely lending money against a borrowing customer's receivables and the customer still retains the ownership of the receivables.

Question

Quizplus · Accepted Answer

Accounts receivable financing generally involves a bank lending money against a company's receivables, while factoring involves a bank purchasing the receivables at a discount and assuming ownership of them.

Accounts Receivable Financing Entails a Bank Actually Taking Over the Ownership