The advance finance provided by the factor firm is generally available at __________ interest cost than the usual rate of interest.
A
Medium
No worries! We‘ve got your back. Try BYJU‘S free classes today!
B
Lower
No worries! We‘ve got your back. Try BYJU‘S free classes today!
C
Higher
Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses
D
Equal
No worries! We‘ve got your back. Try BYJU‘S free classes today!
Open in App
Solution
The correct option is C Higher
Factoring, where firms sell their invoices to a factor firm. They do this for some cash right away. This advance finance provided by by the factor firm is available at a higher rate of interest than usual rate of interest as the availability of finances is very quick and has less waiting period.