Invoice discounting
1.the bank has recourse to the borrower
2.the borrower keeps the debtor’s ledger
3.Chances of bad debts are high and this may increase the cost of the company of using such finance.
4.invoices act more or less as securities for a short term loan
5.the discount rate is usually low
Factoring
1.the factor has no recourse to the borrower
2.The factor takes over the debtor’s ledger.
3.The chances of bad debts are minimal and even then these are borne by the factor.
4.The invoices are sold outright to the factors and cannot act as securities for loans.
5.The discount rate is relatively high.
sharon kalunda answered the question on April 16, 2019 at 14:19
- Highlight the similarities between invoice discounting and factoring.(Solved)
Highlight the similarities between invoice discounting and factoring.
Date posted: April 16, 2019. Answers (1)
- What are the disadvantages of using Invoice discounting as a source of finance?(Solved)
What are the disadvantages of using Invoice discounting as a source of finance?
Date posted: April 16, 2019. Answers (1)
- 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)