Factoring Process 0% 50 What determines the advance rate that the factor provides to the seller? The debtor's creditworthiness and the terms of the invoice The amount of debt the seller carries The past payment track record between the seller and the buyer The seller's total revenue What is the final step in the factoring process once the debtor has paid the factor? The debtor sends a confirmation letter to the seller The factor returns any remaining balance to the seller after deducting fees The seller issues a new invoice to the debtor The seller repays the factor with interest In a non-recourse factoring agreement, what happens if the debtor defaults on payment? The factor absorbs the loss The factor can seize the seller's assets The seller must refund the advance to the factor The debtor must provide collateral to the factor What is the first step a business must take to initiate an invoice factoring transaction? Sending the invoice to the debtor Submitting an application to the factoring company Negotiating payment terms with the debtor Conducting a credit check on the debtor After the factoring company approves the application, what is the next step in the factoring process? The seller receives the full invoice amount from the factor The seller submits invoices to the factor for funding The seller negotiates a discount rate with the debtor The factor sends a payment request to the debtor Which of the following best describes the role of the notice of assignment in the factoring process? A document that transfers ownership of the seller's assets to the factor A financial statement that details the seller’s receivables A notification to the debtor that payment should be made directly to the factor A legal agreement that outlines the terms of the factoring arrangement What occurs after the factor has advanced the funds to the seller under non-recourse factoring? The seller knocks off the account receivable in the balance sheet The factor files a legal claim against the seller The debtor pays the factor according to the original invoice terms The factor takes over the management of the seller's receivables assigned to the factor Please enter your name and email address to view the results. Your score is The average score is 49% LinkedIn Facebook Twitter 0%
