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