Few Structures of Factoring 0% 4 What distinguishes reverse factoring from traditional factoring? Reverse factoring is initiated by the buyer, while traditional factoring is initiated by the seller Reverse factoring involves a higher interest rate Reverse factoring is only available for international transactions What is the main advantage of reverse factoring for the buyer? It transfers the risk of non-payment to the factor It reduces the buyer's overall credit risk It allows the buyer to extend payment terms with suppliers It enables the buyer to negotiate higher discounts with suppliers Why might a seller choose invoice discounting over factoring? To reduce the cost of financing To receive immediate cash for every invoice To transfer credit risk to a third party To maintain control over their customer relationships 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 It depends upon the factor No All of the above From the seller’s perspective, how does non-recourse factoring benefit their cash flow management? By offering a higher advance rate By eliminating the need for collateral By allowing the seller to delay payments to suppliers By transferring the risk of debtor non-payment to the factor How does factoring benefit the buyer in a supply chain? It increases the buyer’s need for working capital It extends the buyer’s payment terms with the seller It forces the buyer to pay upfront for goods It reduces the buyer’s financing costs Please enter your name and email address to view the results. Your score is The average score is 54% LinkedIn Facebook Twitter 0%
