Question

Factoring and forfeiting are two different ways of extending credit by financial institutions. Which of the following is NOT a difference between factoring and forfeiting?

Q: Answer-Factoring and forfeiting are two different ways of extending credit by financial institutions. Which...

In Factoring the seller receives payment in 2 instalments majority around 75-90 is received at the time of sale of invoice and the balance at the end of the invoice maturity. While in forfeiting the funding is provided 10 upfront at the time of sale of export invoice.

A Factoring is with or without recourse while forfeiting is always without recourse

B Factoring is usually done for domestic transactions while forfeiting is done in case of international transactions.

C In factoring the seller of invoice receives the payment upfront while in forfeiting the seller of invoice gets the payment in instalments

D Factoring involves short term maturity invoices while forfeiting involves medium to long term invoices

E All are the differences between factoring and forfeiting

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Factoring and forfeiting are two different ways of extending credit by financial institutions. Which of the following is NOT a difference between factoring and forfeiting?

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