Receivables Purchase
From Open Risk Manual
Definition
Receivables Purchase is an umbrella category for a variety of Supply Chain Finance business models in which sellers of goods and services obtain financing by selling all or a part of their receivables to a finance provider.
The receivables are transferred into the ownership of the finance provider by means of the assignment of title rights appropriate to the jurisdiction in question. Upon such a change of ownership, the seller will receive an advance payment for the receivables, which may include a margin or deduction reflecting the quality of the receivables, and a finance charge based on the pricing agreed between the finance provider and the client.
Specific Business Models
See Also
