General Studies · Bill Finance
How does bill finance (discounting/purchasing of bills) typically operate for a bank?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The loan is extended and paid back by the borrower through monthly cash flows regardless of the buyer's payment
- 2The advance is liquidated or repaid when the buyer of the goods pays the amount of the discounted bill to the bank on the due date✓
- 3The borrower repays the bank in fixed monthly installments before the buyer receives the goods
- 4The borrower must provide physical immovable property as primary collateral before every individual bill transaction
Correct answer
The advance is liquidated or repaid when the buyer of the goods pays the amount of the discounted bill to the bank on the due date
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