Accounts receivable factor

Accounts receivable factor is a term given to a service that buys a company or a vendor's accounts receivable at a discounted value in exchange for a guaranteed cash value. The vendor gets the needed funds before payments from customers are received allowing the vendor to acquire the needed capital to keep the business running. Since not all can be collected from a vendor's accounts receivable in a timely way, the discounted price offered by the company buying the vendor's accounts receivable is considered the risk involved in the transaction.

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