Assignment Of Accounts Receivable

Quick definition of accounts receivable: When a company does whatever it is they do (build cars, make movies, etc.) they don't always get paid immediately. Sometimes, they bill a client and have to wait for the client to send payment.
For example, if an ice cream company ships a truckload of Dragonfly Ripple to a supermarket (it's Kermit the Frog's favorite flavor), it will send the supermarket company an invoice. Typically, the supermarket will have 30 days to pay. The amount owed by the supermarket is an account receivable for the ice cream company.
Now to the term "assignment of accounts receivable." In this process, the ice cream company would then use the debt from the supermarket as collateral for a loan. Basically, they would say to the lender, "Hey, we're owed this money. Can we borrow something for a bit and pay you back when we get paid?" If the ice cream company defaults, then the lender has the right to collect from the supermarket in order to get its money back.