Pledges of accounts receivable are never made on a notification basis because the lender does not trust the borrower to collect the pledged account receivable and remit these payments as they are received.

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Pledges of accounts receivable are often made on a notification basis, which means the lender is notified of the payment received by the borrower and may verify that the payment has been remitted to the lender. This allows for better monitoring and reduces the risk of the borrower keeping the payments for themselves.

Pledges of Accounts Receivable Are Never Made on a Notification