Many Small Businesses Rely on Factoring as a Source of Short-Term

question 214

Multiple Choice

Many small businesses rely on factoring as a source of short-term financing because

• A) factoring provides a much cheaper source of funds than bank loans.
• B) interest paid to a factor qualifies for a tax credit.
• C) small firms often find it difficult to qualify for bank loans.
• D) loans provided by factors do not require collateral.

---

Definitions:

Newly Adopted Child

A child that has recently become a member of a family through the legal process of adoption.

Foster Child

A child placed into a temporary or permanent caregiving situation with adults other than their biological parents.

Respondeat Superior

A doctrine in agency law under which a principal (employer) may be held liable for the wrongful acts committed by agents or employees acting within the scope of their agency or employment.

Agency Law

The legal principles governing the relationship between an agent who acts on behalf of another person or entity, known as the principal, and the extent of their legal authority.