When A Company'S Receivables Are Used As Security For A Loan, The Company Is Said To Have

 When a company's receivables are used as security for a loan, the company is said to have "pledged" or "assigned" its receivables. This means that the company has offered its accounts receivable (money owed by customers for goods or services provided) as collateral to secure a loan from a lender.

In this scenario, if the company defaults on the loan, the lender has the right to seize the pledged receivables to recover the outstanding debt. Pledging receivables can help a company secure financing, as it provides assurance to the lender that there are assets available to cover the loan in case of default.

Pledging receivables is a common practice in asset-based lending, where a company uses its assets, such as inventory, equipment, or accounts receivable, as collateral to obtain financing. It allows businesses to leverage their assets to access capital for operations, expansion, or other financial needs.

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