Compared to other forms of business finance such as term loans,bill financing offers:
A) the advantages of lower costs for the bank not having to fund the bill on its balance sheet.
B) disadvantages for the bank due to the issue fees involved.
C) higher costs due to the lack of collateral.
D) lower flexibility for the bank.

Question

Quizplus · Accepted Answer

Bill financing offers the advantage of lower costs for the bank as it does not have to fund the bill on its balance sheet. This often translates to lower interest rates or fees for the borrower. Additionally, the collateral for bill financing is the bill itself, which can be easier to obtain and requires less paperwork than traditional collateral.

Compared to Other Forms of Business Finance Such as Term