User talk:Sushilkumarp

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Accounts Receivable Financing

Exporters of goods maybe willing to ship goods to the importer without any assurance of payment from a bank. This could take the form of an open account shipment or a time draft. Prior to shipment the exporter should have conducted his own credit check on the importer to determine credit worthiness. If the exporter is willing to wait for payment it is extending credit to the buyer.

If the exporter requires funds immediately it may require financing from a bank. This is referred to as accounts receivable financing in which the bank will provide a loan to the exporter secured by an assignment of the accounts receivable.The bank's loan is made to the exporter based on its credit worthiness.In the event the buyer fails to pay the exporter for whatever reason, the exporter is still responsible to repay the bank.