That is, the financial institution will pay the manufacturer somewhat less than the face amount of the receivables (e.g. 90%).  If the assignment is without recourse (i.e. the manufacturer will not have to buy back receivables which prove uncollectible), the assignment resembles a purchase and the discount reflects both the profit which the financial institution wishes to make upon collection of the receivables and a hedge against the risk that not all of the receivables will be collectible.   If the assignment is with recourse (i.e. the manufacturer will have to buy back receivables which prove uncollectible), the assignment resembles a loan in which the receivables look like collateral and the discount looks like interest charged pending repayment of the loan through collection of the receivables.  Article 9 of the Commerical Code applies to most commercial assignments (i.e. whether with or without recourse), even if the assignment looks like a purchase, because the terms of the assignment may blur the distinction between purchase and loan.  See Commentary.Sale of receivables.