Under the terms of most conditional sale assignments to finance companies, the conditional seller remains liable for payment if their conditional buyers should default. This arrangement is known as
A) recourse financing.
B) an equitable assignment.
C) discount financing.
D) factoring.
E) account receivable installment sales.

Question

Quizplus · Accepted Answer

Recourse financing is a type of financing in which the lender (in this case, the finance company) has the right to seek payment from the seller (the conditional seller) if the buyer (the conditional buyer) defaults on their payment obligations. This means that the seller remains liable for payment even though they have assigned the conditional sale to the finance company.

Under the Terms of Most Conditional Sale Assignments to Finance