FIN370 4.3: Specialized Financial Services

What is factoring?

• The purchase of account payable by third party which provide immediate cash flow

• The purchase of account receivable by third party which provide immediate cash flow

• A type of financing where the company use its account payable as a collateral to obtain cash

• A type of short-term financing where the company put an asset as a collateral

Which of the following is NOT true about hire purchase

• It is a type financing services that allow an individual to purchase a house

• The buyer rent the item purchased under hire purchase agreement until all the installment has been fully made.

• It is a type of financing that usually used to purchase machine, equipment and vehicle

• The borrower will select the item to be purchased before submitting the application for the hire purchase

Which of the following is the reason why people choose leasing service?

• Low interest rate

• improving cash flow

• easier to obtain because it does not require a large loan or down payment

Choose the most correct statement about bridging loan

• It is a type of loan used to purchase machinery

• It is a long-term loan to purchase a new property

• Commonly used to finance the purchase of a new house before the selling of an existing property.

• It will take some time for the buyer to receive the fund once the application has been approved.

Which of the following statements best describe end financing?

• End financing is a long-term loan just like a housing loan

• end financing can be used to purchase a new house

• end financing only available to conventional banking

• End financing can be use to purchase a partially-financed house