26. Forms of title-based financing

Abstract

This chapter examines the ways in which goods and things in action can be dealt with to facilitate the financing of business. It begins with a brief survey of the financing mechanisms available to businesses and proceeds to discuss receivables financing, whereby a succession of debts owed to a business can either be sold outright or subjected to a security interest in favour of a financier, focusing specifically on outright sale. The chapter also discusses how the fact that title to an asset can be split between an ‘owner’ and a person with physical possession of it can be used to advantage in providing flexibility and tax advantages in financing the acquisition of capital items for use in a business.