Shadow banks eye accounts receivable as lenders retreat

Hedge funds target 10–12% returns on credit risk from unpaid invoices

A different approach: shadow banks are less affected by regulation

Hedge funds are getting into the accounts receivable game – lending to companies against their unpaid invoices – as capital-constrained banks retreat. It is the latest example of non-banks replacing banks as risk-takers but, here, it is often happening via partnership, rather than competition. Banks are continuing to arrange and structure the financing, as well as stumping up some of the funding.

Large, publicly traded US companies have an average of $1.8 billion of working capital tied up in

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