Business Glossary

financing that seeks to convert particular assets into working cash in exchange for a security interest in those assets. The term is replacing commercial financing as major banks join commercial finance companies in addressing the financing needs of companies that do not fit the traditional seasonal borrower profile. Although the prevalent form of asset financing continues to be loans against accounts receivable, inventory loans are common and second mortgage loans, predicated as they usually are on market values containing a high inflation factor, seem to gain popularity by the day.