Special purpose vehicle
Draft definition. Technical and editorial approval pending.
A separate legal entity formed to hold the receivables being financed, typically with restricted permitted activities. The intention is to separate the financed assets from the originating operating company. Whether that separation holds depends on documentation, capitalisation, operating practice, whether the asset transfer is respected as a true sale, and the governing jurisdiction.
In practice
You form a fictional SPV that purchases 10m USD of receivables from your operating company, funded by a 7.2m USD draw and 2.8m USD of equity. Forming the entity alone does not make it bankruptcy remote. Ask counsel what specifically supports that analysis in your structure.
Read this in context: Anatomy of a Deal.