Identify a true statement about self-liquidating loans.Multiple choice question.They require the involvement of strong creditworthy customers such as the government.They develop a factoring arrangement whereby the factor actually buys the accounts receivable.They are often used for seasonal financing and for building up inventories.They are often used for mortgage financing.

When strong creditworthy customers are involved in an accounts receivable loan, an entrepreneur can develop a factoring arrangement. Which of the following statements is true about this arrangement?Multiple choice question.The cost of factoring the accounts receivable is lower than the cost of securing a loan against the accounts receivable.In the event that any of the receivables is not collectible, the factor (the bank) sustains the loss, not the business.The factor "buys" the accounts receivable at a value above the face value of the sale under this arrangement.The factor (the bank) cannot collect the money directly from the account in this arrangement.

Identify a true statement about debt financing.Multiple choice question.It is also termed asset-based financing.It never requires an additional fee.It is also called reward-based funding.It does not require an asset as a collateral.

Identify a true statement about character loans.Multiple choice question.These loans are usually easily obtained to finance a company's land, plant, or another building, often up to 75 percent of its value.These loans frequently must have the assets of the entrepreneur or other individual pledged as collateral or the loan cosigned by another individual.These self-liquidating loans are often used for seasonal financing and for building up inventories.These loans are usually available only to strong, mature companies.

Analyse one benefit to a business of debt factoring as a suitable form of finance.

Which of the following is not an informal source of credit?*1 point(a) Money-lender(b) Relatives and Friends(c) Commercial Banks(d) Traders