What primary financial service do commercial finance companies provide?

Commercial finance companies primarily focus on providing discounted accounts receivable financing as their core service. This form of financing involves buying accounts receivable at a discount, which allows businesses to receive immediate cash flow. By purchasing the receivables, these companies enable businesses to maintain liquidity and fund ongoing operations without having to wait for customers to pay their invoices.

This service is especially beneficial for companies that might not have access to traditional bank loans or need funds quickly to capitalize on growth opportunities. Discounted accounts receivable financing helps bridge the gap between the time a product is sold or a service is rendered and the time payment is received from customers.

Other choices represent different financial sectors that do not align with the primary offerings of commercial finance companies. Long-term mortgages are typically associated with banks and mortgage lenders, mutual fund investments are handled by investment firms, and private equity funding is derived from investment firms or private equity funds seeking to invest in businesses for growth or restructuring. Each of these services operates in a distinct area of finance, further emphasizing the specialization of commercial finance companies in accounts receivable financing.