When using factoring to finance international trade, a bank will provide a loan to the exporter secured by an assignment of the account receivable.

Name: When using factoring to finance international trade, a bank will provide a loan to the exporter secured by an assignment of the account receivable.
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Question

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Factoring involves selling accounts receivable to a third party (factor) at a discount, not securing a loan from a bank.

When Using Factoring to Finance International Trade, a Bank Will