A loan provided by a financial institution based on a proportion of the face value of credit sales outstanding, is known as:

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This type of loan is known as invoice discounting, where a financial institution provides a loan based on a percentage of the face value of credit sales outstanding. Factoring, on the other hand, involves the financial institution taking over the credit sales and collecting them directly from the customers. Secured loans require collateral, while a bank overdraft is a short-term borrowing facility.

A Loan Provided by a Financial Institution Based on a Proportion