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What are the different sources available for financing the receivables?
Following are the different sources available for financing the receivables:
1. Bills Discounting
2. Cash Credit against hypothecation of book debts as the security
3. Factoring: It is process in which the selling company sells its accounts receivable at a discount to a factor who then assumes the credit risk of the account debtors and receives cash as the debtor settle their accounts. Generally factoring is an expensive source of financing.
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