Accounts receivables loans provided by finance companies provide firms with:

Question

Quizplus · Accepted Answer

Accounts receivables loans allow firms to turn a relatively illiquid asset (i.e. money owed to them by customers) into liquidity (i.e. cash they can use for operations). This can help to improve the firm's cash flow and overall financial stability. Start-up capital and inventory loans are not necessarily related to accounts receivables loans. While it is true that accounts receivables loans can turn a liability (i.e. money owed to the firm) into an asset (i.e. cash), this is not the primary benefit provided by these loans.

Accounts Receivables Loans Provided by Finance Companies Provide Firms With