With ____, a bank purchases a receivable without recourse to the exporter.

Question

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Factoring involves the bank purchasing a receivable from the exporter without any recourse, meaning the bank assumes all risk of non-payment by the importer. Accounts receivable financing involves the bank providing a loan secured by the exporter's receivables, but the exporter still bears the risk of non-payment. A banker's acceptance is a type of financial instrument used for international trade transactions, and a letter of credit is a guarantee of payment from a bank to an exporter, but neither of these involve the bank purchasing a receivable without recourse.

With ____, a Bank Purchases a Receivable Without Recourse to the Exporter