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Webster's New World Finance and Investment Dictionary » overhead financing
overhead financing
overhead financing definition - finance
A lending program that is designed to help
companies meet their monthly payroll expense when they have signed long-term
contracts with customers who are billed on a monthly basis. Overhead financing
may be provided by banks, but is often a product offered by specialty financing
companies. To access overhead financing, a company submits an invoice for work
that has been completed through a given time cycle. Advances are made to
provide funds to coincide with the payroll periods. At the end of the month,
when an invoice to the client is created, the overhead financing that has been
provided is rolled into accounts receivable financing. That financing is
usually converted into accounts receivable loans within 30 days.
Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.
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