When a financier provides a business with finance by buying its business's accounts receivable this is called:

Question

Quizplus · Accepted Answer

Factoring refers to when a financier buys a business's accounts receivable at a discount in exchange for immediate cash. Floor plan finance is specifically used in the automotive industry to finance the purchase of inventory. Trade credit is when a business buys goods or services from another business but agrees to pay for them at a later date, while accounts receivable financing refers to when a business uses its accounts receivable as collateral for a loan.

When a Financier Provides a Business with Finance by Buying