Asked by Rounak Munoyat on Apr 26, 2024

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Factoring makes it possible for a loan to be increased as sales and receivables grow.

Factoring

A financial transaction where a business sells its accounts receivable to a third party at a discount to raise immediate capital.

  • Learn about the theory and economic impact of factoring, focusing on its role in cash flow and oversight of credit.
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SI
soroor iraniMay 03, 2024
Final Answer :
True
Explanation :
Factoring is a type of financing that involves selling accounts receivable (i.e. outstanding invoices) to a third-party financial institution (i.e. a factor) at a discount in exchange for immediate cash. As sales and receivables increase, the amount of cash available through factoring also increases, allowing for the possibility of an increased loan amount.