Kirsten purchased a new dining room table and china cabinet from discount furniture, which offered a one-year special with no interest or financing charges. when kirsten makes her purchase, discount furniture checks her credit and seeks approval for her. upon approval, kirsten receives information informing her that she will make payments to regional finance company. this arrangement is an example of

Question

Darwin Lee

Business

6 September, 14:19

Kirsten purchased a new dining room table and china cabinet from discount furniture, which offered a one-year special with no interest or financing charges. when kirsten makes her purchase, discount furniture checks her credit and seeks approval for her. upon approval, kirsten receives information informing her that she will make payments to regional finance company. this arrangement is an example of

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Cory Mccarthy · Answer 1

This arrangement is an example of "factoring".

A factoring arrangement is an agreement between the organization and a factoring firm. The organization will factor, or move, their records receivable to the firm at a markdown for a quick loan. The level of loan depends not on your company's credit record, but rather on the financial record of your clients.

Factoring agreements enable your organization to get required financing without taking out a bank credit. It is something that you may not need or have the capacity to do.