Eligible receivables

Definition

Eligible receivables in plain English

When a company borrows against the money its customers owe it (its receivables), the lender won't accept just any IOU as backing — only the trustworthy ones. Eligible receivables are the ones that pass the lender's checklist: things like the customer being reliable, the debt not being too old, and the invoice being a normal arm's-length sale. It's like a bouncer at a club with a strict guest list — only receivables that meet the rules get counted toward how much you're allowed to borrow. The shakier IOUs are left outside and don't help you get cash.

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