Economics · Financial Services
Which of the following statements correctly defines factoring?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Factoring is identical to forfaiting in all aspects.
- 2Factoring is a financial service where a company sells its receivables to a factor at a discount for immediate liquidity.✓
- 3Factoring is exclusively used for domestic trade transactions.
- 4Factoring always involves assuming the credit risk of the debtor by the factor.
Correct answer
Factoring is a financial service where a company sells its receivables to a factor at a discount for immediate liquidity.
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