Explore BrainMass
Share

Explore BrainMass

    Fctor or pledge their receivables

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Why would a company want to factor or pledge their receivables if they have to give up 10% or more of the funds owed them by their customers?

    © BrainMass Inc. brainmass.com October 10, 2019, 4:50 am ad1c9bdddf
    https://brainmass.com/business/receivables/factor-pledge-receivables-479768

    Solution Preview

    Factoring or pledging is important tool of working capital management. "Pledging is placing accounts receivable as collateral for a loan (typically from a bank or finance company). Factoring is physically selling accounts receivables (also to a bank or finance company) as a way of speeding up the receipt of cash. The purchaser of the receivables is known as a factor.
    "Sometimes, using accounts receivable ...

    Solution Summary

    Solution discusses factor or pledge receivables

    $2.19