Few Structures of Factoring 0% 37 Why might a seller choose invoice discounting over factoring? To reduce the cost of financing To maintain control over their customer relationships To transfer credit risk to a third party To receive immediate cash for every invoice If I am a service provider in the KPO (Knowledge Process Outsourcing) segment serving a large American bank, can I get my monthly invoice financed through factoring? Yes No It depends upon the factor All of the above How does factoring benefit the buyer in a supply chain? It forces the buyer to pay upfront for goods It reduces the buyer’s financing costs It extends the buyer’s payment terms with the seller It increases the buyer’s need for working capital From the seller’s perspective, how does non-recourse factoring benefit their cash flow management? By allowing the seller to delay payments to suppliers By eliminating the need for collateral By transferring the risk of debtor non-payment to the factor By offering a higher advance rate What distinguishes reverse factoring from traditional factoring? Reverse factoring is only available for international transactions Reverse factoring is initiated by the buyer, while traditional factoring is initiated by the seller Reverse factoring involves a higher interest rate What is the main advantage of reverse factoring for the buyer? It allows the buyer to extend payment terms with suppliers It transfers the risk of non-payment to the factor It reduces the buyer's overall credit risk It enables the buyer to negotiate higher discounts with suppliers Please enter your name and email address to view the results. Your score is The average score is 55% LinkedIn Facebook Twitter 0%
