A debtor finance agreement under which the discounter is not reimbursed by the selling company if the debtor defaults is known as:
A)debtor finance without recourse.
B)debtor finance with recourse.
C)confidential discounting.
D)cooperation discounting.

Question

Quizplus · Accepted Answer

Debtor finance without recourse means that the discounter assumes the risk of the debtor defaulting and is not reimbursed by the selling company. Thus, option A is the correct answer. Option B ("debtor finance with recourse") means that the selling company guarantees payment in the event of a default, so it does not fit the given description. Options C and D are not related to the concept of recourse/non-recourse in debtor finance, so they are also incorrect.

A Debtor Finance Agreement Under Which the Discounter Is Not