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प्रश्न
Briefly discuss any two features of the following sources of finance available to an organisation in India.
Factoring
लघु उत्तर
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उत्तर
The features of Factoring are as follows:
- It is a short-term source of finance.
- Business sells its accounts receivable (invoices) to a third-party (the factor) at a discount.
- There is an immediate cash flow.
- No collateral is required.
- There is a charge factoring fees for administrative services.
- Discount is deducted from the invoice by the factor.
- It involves three parties in factoring.
- The burden of risk is on the factor.
- It is legally binding on the client.
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