Question

The advance finance provided by the factor firm is generally available at __________ interest cost than the usual rate of interest.

• A. Medium
• B. Lower
• C. Higher
• D. Equal

Answer 1

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.