What role does a factor play in providing short-term financing to ...

[Jipu 123]

What role does a factor play in providing short-term financing to a firm? Why would firms that rely heavily on credit sales find factoring attractive?

Question 2

A common tactic of corporate raiders is to start a proxy fight.
 
 Indicate whether the statement is true or false

[scrocafella]

Answer to Question 1

A factor is a company that buys the accounts receivables of other firms. It makes a profit by purchasing the receivables at a discount and then collecting the full amount owed from the credit customers.
Although firms that use factors don't receive the full amount for their receivables, factoring has some advantages. For example, it allows the firm to receive its cash almost immediately rather than having to wait for the credit customers to pay. Since the factor is responsible for collection efforts, the firm may be able to free up resources and use them elsewhere in the organization.

Answer to Question 2

True

[Jipu 123]

Thanks for the timely response, appreciate it

[bdobbins]

Gracias!