1.The discounter has resource to the borrower and in case may debtor fails to honour his obligation then the discounter can turn to the seller to pay such debt and interest on finance advanced to him.
2.It may be an expensive source of finance in particular if the invoices are small and numerous in which case the costs of collecting these may be too high.
3.This type of finance is usually available to those companies whose debtors are highly rated in credit payment point of view thus may be discriminative if a given company has unknown debtors in which case they cannot be discounted.
sharon kalunda answered the question on April 16, 2019 at 14:15
- Highlight the advantages of using invoice discounting as a source of finance.(Solved)
Highlight the advantages of using invoice discounting as a source of finance.
Date posted: April 16, 2019. Answers (1)
- Outline the disadvantages of promissory note.(Solved)
Outline the disadvantages of promissory note.
Date posted: April 16, 2019. Answers (1)
- Highlight the disadvantages (limitations) of using Trade Credit.(Solved)
Highlight the disadvantages (limitations) of using Trade Credit.
Date posted: April 16, 2019. Answers (1)
- Give the reasons why trade credit is popular in Kenya.(Solved)
Give the reasons why trade credit is popular in Kenya.
Date posted: April 16, 2019. Answers (1)
- Discuss the classifications of debt Finance.(Solved)
Discuss the classifications of debt Finance.
Date posted: April 16, 2019. Answers (1)
- Outline the similarities between Ordinary and Preference Shares Capital(Solved)
Outline the similarities between Ordinary and Preference Shares Capital.
Date posted: April 16, 2019. Answers (1)
- Highlight the roles played by the Government in Promoting business incubation.(Solved)
Highlight the roles played by the Government in Promoting business incubation.
Date posted: April 16, 2019. Answers (1)
- State the Benefits of business Incubation.(Solved)
State the Benefits of business Incubation.
Date posted: April 16, 2019. Answers (1)
- Outline the main causes of business Incubation.(Solved)
Outline the main causes of business Incubation.
Date posted: April 16, 2019. Answers (1)
- The Importance of Screening of a business idea.(Solved)
The Importance of Screening of a business idea.
Date posted: April 16, 2019. Answers (1)
- Describe the Process of Screening a Business Idea.(Solved)
Describe the Process of Screening a Business Idea.
Date posted: April 16, 2019. Answers (1)
- State and explain the Negative Impact of Entrepreneurship to Economic Development.(Solved)
State and explain the Negative Impact of Entrepreneurship to Economic Development.
Date posted: April 16, 2019. Answers (1)
- Describe the Theories of Entrepreneurship.(Solved)
Describe the Theories of Entrepreneurship.
Date posted: April 16, 2019. Answers (1)
- Discuss the steps taken by the Government towards Promoting Entrepreneurship.(Solved)
Discuss the steps taken by the Government towards Promoting Entrepreneurship.
Date posted: April 16, 2019. Answers (1)
- Discuss the cultural habits that promote entrepreneurial development.(Solved)
Discuss the cultural habits that promote entrepreneurial development.
Date posted: April 16, 2019. Answers (1)
- What Constitutes Entrepreneurial Culture?(Solved)
What Constitutes Entrepreneurial Culture?
Date posted: April 16, 2019. Answers (1)
- Discuss the requirements of Innovation.(Solved)
Discuss the requirements of Innovation.
Date posted: April 16, 2019. Answers (1)
- Describe the Characteristics of a Potential Entrepreneur.(Solved)
Describe the Characteristics of a Potential Entrepreneur.
Date posted: April 16, 2019. Answers (1)
- Outline the challenges Posed by Emerging Trends in business.(Solved)
Outline the challenges Posed by Emerging Trends in business.
Date posted: April 16, 2019. Answers (1)