discounting of accounts receivable

Definitions

1. Obtaining a working capital (short-term) loan against the discounted value (usually 80 to 90 percent of the invoiced amount) of accounts receivable (A/R) that meet the lender's creditworthiness criteria. The lender does not buy the A/R but only uses them as a collateral. In case of a default, however, the lender has the right to collect direct from the borrower's debtors.

2. Selling A/R at a discounted value (usually 70 to 85 percent of the invoiced amount) to a factor who then becomes responsible for collecting them. See also factoring.

单词	discounting of accounts receivable
释义	discounting of accounts receivable Definitions 1. Obtaining a working capital (short-term) loan against the discounted value (usually 80 to 90 percent of the invoiced amount) of accounts receivable (A/R) that meet the lender's creditworthiness criteria. The lender does not buy the A/R but only uses them as a collateral. In case of a default, however, the lender has the right to collect direct from the borrower's debtors. 2. Selling A/R at a discounted value (usually 70 to 85 percent of the invoiced amount) to a factor who then becomes responsible for collecting them. See also factoring.
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