Economics · Financial Markets and Services
An exporting firm in India opts for Non-Recourse Factoring for its sales to a major overseas client. What crucial advantage does the firm gain from this specific type of factoring?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The firm only pays an interest charge, avoiding the factoring commission fee entirely.
- 2The firm retains the right to collect the receivables if the Factor fails to do so within 30 days.
- 3The Factor assumes the entire credit risk arising from the overseas client's inability to pay, providing 100 percent credit protection to the exporter.✓
- 4The Factor provides an advance of less than 50 percent of the invoice value, making the transaction safer.
Correct answer
The Factor assumes the entire credit risk arising from the overseas client's inability to pay, providing 100 percent credit protection to the exporter.
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