If a business is in need of working capital, one option is to use a(n) ________ that will buy the company's account receivables

Question

slavikrds [6]

2 years ago

6

If a business is in need of working capital, one option is to use a(n) ________ that will buy the company's account receivables

and then handle their collection for a fee.

Business

1 answer:

nekit [7.7K] · Answer 1 · 2022-07-05T23:23:31+03:00

Answer:

A factor company

Explanation:

A factor company is a finance company that specializes in purchasing company's accounts receivable,then goes ahead to collect the balances from the customers for a fee.

A factor company sometimes does this with a recourse to the company whose receivable has been factored or without a recourse.

With a recourse means that any accounts receivable balance uncollected would be transferred to the original company while without a recourse is the opposite situation