Economics · Working Capital Management
What is the primary operational feature of invoice discounting as a short-term financing facility for MSMEs?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The business sells all ownership rights of its long-term equipment to an external leasing firm.
- 2Invoice discounting can only be legal for companies offering software services.
- 3The business receives a permanent non-repayable grant directly from the central bank.
- 4The business leverages its unpaid invoices as collateral to draw early funds while maintaining credit collection accountability.✓
Correct answer
The business leverages its unpaid invoices as collateral to draw early funds while maintaining credit collection accountability.
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