A firm needs to raise cash and at the same time reduce the level of its accounts receivable. This firm would likely benefit most by _______________________.

A) Obtaining an unsecured short-term loan.
B) Applying for a committed line of credit.
C) Assigning its receivables on a short-term loan.
D) Factoring its receivables.
E) Securing any short-term credit with a blanket inventory lien.

Factoring Receivables

The financial transaction where a business sells its accounts receivable (invoices) to a third party (factor) at a discount to obtain immediate cash.

Blanket Inventory Lien

A secured interest over all of the inventory of a borrower, granting the lender the right to seize inventory in the event of non-payment.

Committed Line Of Credit

A credit facility where the bank agrees to lend a specified amount of money to the company over a certain period of time.