Accounts receivable
financing
May be a red flag of
financial weakness
Accounts receivable financing
Accounts receivable financing is the
process of selling a company's accounts receivables for a
discounted lump sum of money. The purchaser then assumes the
risk of the account debtors and receives cash as the debtors
settle their accounts. A firm that sells its accounts receivable
may be in financial trouble and are using this as a method of
raising cash, or they may be concerned about their ability to
collect on certain receivables outstanding
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