Factoring receivables is beneficial to a seller for all of the following reasons except:

a) Allows firms to receive cash earlier.

b) Passes ownership of the receivables to the factor.

c) There are no fees for factoring.

d) Seller avoids the cost of billing and accounting for receivables.

e) May transfer the risk of bad debts to the factor.

Answers

Answer 1

Factoring receivables is beneficial to a seller for all the reasons mentioned above, except for the fact that there are no fees for factoring. Therefore, the option C holds true.

Receivables can be referred to or considered as the total bills or cash which is due to be received by the company, but the amount has not been cleared yet, and is not available directly cash available in the hands of the company. Moreover, when it is factored, it engages the incurring of fees, which is a cost. As this is not a benefit, it is not beneficial with respect to the factoring of receivables.

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Related Questions

thomas learned that one of the reasons he wasn't promoted to department head was because other managers at the same level knew little about him, whereas the person who was promoted had built relationships and was known to others. this is an example of what source of power?

Answers

The person who was promoted had built relationships and was known to others. This is an example of alliances and network power.

What contributes most to an alliance's success?

A strategic alliance may be built on trust, and these connections serve as the cornerstone for developing trust between the people who represent the same two parties to the alliance.

Business relationships include alliances and networks. They focus on your professional network and, like a personal network, strengthen your weaknesses and compensate for your weaknesses.

Therefore, Alliances exist to advance the interests of their members collectively by combining their industrial and financial capabilities to be successful.

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suppose jeff bezos deposits​ $20 million in cash into his checking account at wells fargo bank. if the reserve requirement is​ 10% and no banks hold excess​ reserves, what will be the total change in money​ supply?

Answers

The total change in money supply, given the amount deposited by Jeff Bezos and the reserve requirement, is + $ 180 million.

How to find the change in money supply ?

The total amount of reserves held by a bank rises with each dollar deposited into an account. The bank will lend out the extra reserves while keeping some of the necessary reserves on hand. The money supply is increased when such loan is made. Banks "generate" money in this way to expand the available supply.

To find the change in money supply, first find the money multiplier by the formula :
= 1 / Reserve requirement

= 1 / 10 %

= 10

The change is therefore :

= Amount left after reserve requirement x Money multiplier

= ( 20 million x ( 1 - 10% )) x 10

= 18 million x 10

= $ 180 million

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The Product Manager is responsible for which three activities? (Choose three.)



Establishing Features and Benefit Hypothesis


Assigning Agile Release Trains to a common technological and architectural vision


Developing user story acceptance criteria


Defining Program Backlog content


Prioritizing Features for optimum economic value


Prioritizing Capabilities and Enablers

Answers

Prioritizing Capabilities and Enablers, Establishing Features and Benefit Hypothesis and Prioritizing Features for optimum economic value.

For the whole product life cycle, product management must support development by defining desired, viable, practicable, and sustainable solutions that meet consumer needs. The level of intricacy of the Solution determines the role. One Product Manager may perform the role of Product Management for some solutions. Others might require a group of product managers. Introduction, growth, maturity, and decline are the four distinct stages of the product life cycle that successful solutions pass through. Each solution is guided by product management through these phases, ensuring that maximum business value is realized throughout the solution's lifespan.

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which type of inquiry (hard or soft) may occur when renting an apartment or opening a checking or brokerage account? question 3 options: hard. soft. both hard and soft. neither hard nor soft

Answers

C: 'both hard and soft' types of credit inquiry may occur when renting an apartment or opening a checking or brokerage account.

Both hard and soft types of inquiry pull the same financial data but for different purposes. A hard inquiry is typically done when you apply for a credit card or loan; in contrast a soft inquiry is conducted to serve the purposes, such as pre-screening for credit card offers. Thus, in the context of the given question where the scenarios such as renting a house or opening a checking or brokerage account are given, both hard and soft types of inquiry may occur.

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which one of the following is the focus of activity-based management? a. to improve allocation of indirect production costs. b. to reduce the number of cost pools. c. to increase the number of volume-related allocation bases. d. to improve the effectiveness of activities.

Answers

The focus of activity-based management is to (d) improve the effectiveness of activities.

Activity-based costing aims to identify and minimize cost drivers by maximizing resources. Activity-based management concentrates on business processes and managerial activities driving organizational business goals. Activity-based management (ABM) is a technique for examining a company's profitability and identifying strengths and shortcomings in each area of its operations.

ABM is used by management to identify which sections of the company are losing money so that they may be improved upon or eliminated entirely. ABM frequently uses data obtained through activity-based costing (ABC), a technique for identifying and decreasing cost drivers through more efficient resource utilization.

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when you give a clerk a $20 bill and receive a pair of shoes in return, money is serving which function?

Answers

Medium of exchange , A medium of exchange is a device or system that facilitates the sale, purchase, or transfer of products between persons.

A system must represent a standard of value in order to serve as a medium of exchange. Additionally, all parties must accept that standard.

Money serves as a means of exchange, allowing people to exchange products and services with one another. It also functions as a value storage, allowing people to accumulate money through time.

Finally, it serves as a unit of value, allowing individuals to compare the worth of various products. Grant Sanderson created it.

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when a large amount of land is required for the affordable production of something, that product is said to be . multiple choice question. capital-intensive labor-intensive resource-intensive land-intensive

Answers

When a large amount of land is required for the affordable production of something, that product is said to be land-intensive.

Give a brief account on factors of production.

In economics, inputs—also known as resources or factors of production—are the things that are used in the production process to create output, which includes commodities and services. According to a connection known as the production function, the quantity of output depends on how much of the various inputs are used. Land, labor, capital, and entrepreneurs are the four primary sources of production (or enterprise). The components are frequently referred to as "producer goods or services" to distinguish them from the products or services that customers buy, which are frequently referred to as "consumer goods."

Factors come in two varieties: primary and secondary. Land, labor, and capital are the three main components already discussed. Due to their reliance on land, labor, and capital for acquisition, materials and energy are viewed as secondary variables in classical economics.

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what is an example of an issue that might be addressed by supply chain event management?

Answers

Receiving complaints from the consumers regarding the manufacturing defects in the products sold by the company might be considered as an example of an issue that might be addressed by supply chain event management.

Supply chain management can be referred to or considered as a management wherein the functions of producing or manufacturing of goods is divided between the different groups. This is done to ensure efficiency and specialization in manufacturing functions. Moreover, it also aims at addressing the issues related to the improvements within the organizational functioning.

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Industrial machinery is an example of O physical capital O a factor of production that in the past was an output from the production process. O something that influences productivity. O All of the above are correct. Question 10 Which of the following best illustrates the human capital of a survivor stranded on an island? O the fresh fruit and fish on and around the island her previous training in a survival course O the fishing poles she has produced O the invention of a better fishing lure

Answers

Her preceding instruction in a preservation course best exemplifies the human resources of an island survivor.

What exactly do you mean by production?

The process of creating or production products and services from components or raw materials is known as production. In those other statements, production takes the input and transforms them into a consumable output - a good or product of value to the a finished or customer.

What are the three kinds of production?

Basic production systems are classified into three types: batch systems, continuous systems, and project systems. Overall hardware and methods are employed in the batch system to generate small amounts of outcome with specifications which vary greatly from batch to batch.

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factories readily employed women and children because they received higher wages and benefits. truefalse

Answers

Tasks tended to be divided for efficiency's sake which led to repetitive and monotonous work for employees.

In industries, the working environment was frequently unpleasant. The days were lengthy, with ten to twelve hours on average. Oftentimes, dangerous working circumstances resulted in tragic accidents. For the purpose of efficiency, tasks have a tendency to be separated, which results in repetitious and dull labour for employees. Workers now enjoy better pay, more acceptable hours, safer working conditions, health benefits, and assistance for retirement or injury thanks to the efforts of labour unions. The abolition of child labour was also made possible by labour unions. Uriah S. Stephens established the Knights of Labor in 1869*. The group had its headquarters in Philadelphia and initially operated as a tiny, covert working-class fraternity. However, under Terence V.'s tough direction by the late 1880s.

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Your friend tells you he is going to start investing and would like to earn a 10% return. They say stocks make them nervous, so they will only be investing 10% in stocks and the remaining 90% will be invested in bonds. What would you say to him?

Answers

If you invest a 100% in stocks however, you stand to make an average of 9.2% but a chance of a worst return of -40.40%.

What are stocks?

Stocks are a sort of security that grants owners a stake in a business. Another name for stocks is "equities." United States Securities and Exchange Commission

Stocks can be divided into numerous categories based on a variety of factors, including fundamentals, industry, risk, dividend payout, and business size.

A stock reflects a claim on a company's assets and earnings as well as a share in the ownership of the business. As a result, investors own a portion of the business.

Fractional shares of stock, which are less than whole shares of ordinary stock, also signify ownership in a corporation.

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Members of the service corps of retired___are retired local businesspeople who volunteer their services to counsel and mentor new business owners.

Answers

Members of the Service Corps of Retired Executives are retired local businesspeople who volunteer their services to counsel and mentor new business owners.

Who are the Members of the Service Corps of Retired Executives ?

Members of the Service Corps of Retired Executives  can be defined as  those people that help to advices and mentor new business owners so as to enables them to succeed in  their various business.

Service Corps of Retired Executive are as well know as a Small Business Administration that offers vital or essential information for small business owners.

Therefore the statement that filled the gap  is executives.

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the montaneros file a joint return in 2022 and reported $1,435,700 ordinary taxable income for regular tax purposes and had $158,200 positive amt adjustments and preferences. compute their tentative minimum tax.

Answers

Their tentative minimum tax is : AMT Amount = A * (B – C) – D

A = 15%

B = The individual's adjustable tax income.

C = $40,000, the AMT exemption amount.

D = Allowable non-refundable tax credits.

TMT = 15% × (14,35,700 - 40,000) - 158,200

TMT = 51,155

What is a provisional tax?

The least tax that a person may deduct from an estate tax is known as the tentative tax. After all exemptions and deductions to reduce tax liability have been used, the estimated tax is calculated. Placing an estate's total worth in the appropriate estate tax category yields a rough estimate of the tax.

What distinguishes the AMT from the tentative minimum tax (TMT)?

The difference between the two sums is utilized to generate a tax using a rate schedule after the two sums have been computed. The discrepancy produces the so-called preliminary minimum tax (TMT).

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a project has annual cash flows of $5,500 for the next 10 years and then $9,000 each year for the following 10 years. the irr of this 20-year project is 12.45%. if the firm's wacc is 12%, what is the project's npv? do not round intermediate calculations. round your answer to the nearest cent.

Answers

The project's NPV $209.56 approximately. The worth of all future cash flows, both positive and negative, discounted to the present, during the course of an investment, is known as net present value (NPV).

For the given question, the project's NPV is computed as shown below:

NPV = Initial investment + Present value of future cash flows

Present value is computed as follows:

= Future value / (1 + r)^n

So, the NPV at 9% is computed as follows:

= $ 5,500 / 1.121 +  $ 5,500 / 1.122 +  $ 5,500 / 1.123 +  $ 5,500 / 1.124 +  $ 5,500 / 1.125 +  $ 5,500 / 1.126 +  $ 5,500 / 1.127 +  $ 5,500 / 1.128 +  $ 5,500 / 1.129 +  $ 5,500 / 1.1210 + $ 9,000 / 1.1211 + $ 9,000 / 1.1212 + $9,000 / 1.1213 + $ 9,000 / 1.1214 + $ 9,000 / 1.1215 + $ 9,000 / 1.1216 + $9,000 / 1.1217 + $9,000 / 1.1218 + $ 9,000 / 1.1219 + $ 9,000 / 1.1220

= $ 129,152.6577 approximately

The project's NPV at 12.45% is computed as follows:

= $ 5,500 / 1.12451 +  $ 5,500 / 1.12452 +  $ 5,500 / 1.12453 +  $ 5,500 / 1.12454 +  $ 5,500 / 1.12455 +  $ 5,500 / 1.12456 +  $ 5,500 / 1.12457 +  $ 5,500 / 1.12458 +  $ 5,500 / 1.12459 +  $ 5,500 / 1.124510 + $ 9,000 / 1.124511 + $ 9,000 / 1.124512 + $ 9,000 / 1.124513 + $ 9,000 / 1.124514 + $ 9,000 / 1.124515 + $ 9,000 / 1.24516 + $ 9,000 / 1.124517 + $ 9,000 / 1.124518 + $ 9,000 / 1.124519 + $ 9,000 / 1.124520

= $ 128,943.0934

Now, we shall take the difference of the two NPV's as computed above:

= $ 129,152.6577 - $ 128,943.0934

= $ 209.56 approximately

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in countries with highest malnutrition rates, both personal and national economies decline as productivity ceases.

Answers

In countries with highest malnutrition rates, both personal and national economies decline as productivity ceases True.

What is the primary reason for malnutrition and undernourishment in the world?

Malnutrition is a widespread issue. Poverty and a lack of knowledge about nutrition are the main factors in both the developed and developing worlds.

Where in the globe has the highest rate of hunger?

The area with the highest prevalence (% of population) of hunger is Sub-Saharan Africa.

Which of the following is the primary cause of hunger and malnutrition?

Food poverty is the main factor causing hunger in the US and other industrialized nations. Many people go without eating because they lack the funds to pay for both food and other requirements.

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1. what distribution channels does taza chocolate use, and what do they contribute to the company’s overall marketing efforts?

Answers

Taza mostly relies on trustworthy wholesalers for distribution and works hard to develop close bonds with them much as it does with its suppliers. Overall, the business maintains a transparent and individualized distribution method in an effort to provide clients with an integrated marketing experience.

How does a business leverage marketing initiatives?

A business employs marketing initiatives to raise awareness of and generate demand for its goods and services. Social media, television and radio advertisements, online ads, and other marketing techniques are all effective.

What various forms of marketing activity are there?

A business can increase exposure among potential clients and generate demand and interest for its products through marketing initiatives. Marketing strategies can be carried out in a variety of efficient methods. Social media, television and radio advertisements,

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if total revenue exceeds fixed cost, a firm a. should produce in the short-run. b. has covered its variable cost. c. is making short-run profits. d. may or may not produce in the short-run, depending on whether total revenue covers variable cost.

Answers

A company is producing short-term profits if its overall revenue is greater than its fixed costs.

An economic profit is made by the company when total revenue exceeds the entire costs. When the difference between total income and the total cost is the biggest, which is at 10 cans each day, the profit is maximized.

The business would have a greater economic loss if total revenue was less than total variable costs. So the company would briefly stop operations. The biggest economic loss the company will experience is fixed costs. When price equals average variable cost, the firm's economic loss is equal to the total fixed cost.

Increasing revenue could result in higher costs and lower profit margins. Cost-cutting measures may lead to decreased sales as well as reduced profit margins if market share is eventually lost.

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the production budget shows expected unit sales of 37000. beginning finished goods units are 3200. required production units are 38600. what are the desired ending finished goods units

Answers

3200+38600 = 41800 - 37000 = 3000 is the the desired ending finished goods units

The cost of the completed goods inventory at the conclusion of each budget period is determined by the ending finished goods inventory budget. The unit quantity of finished goods at the end of each budget period is also included, although the production budget is the true source of that data.

The company places a lot of importance on the ending finished goods inventory budget because it can calculate the value of each unit produced based on the cost of raw materials, direct labor, and overhead.

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an asset was acquired on january 1, 2021, for $31,000 with an estimated four-year life and $2,000 residual value. the company uses straight-line depreciation. calculate the gain or loss if the asset was sold on december 31, 2023, for $10,000.

Answers

Using the straight line depreciation method, if the asset is sold for $10,000 on December 31, 2023, the gain is $9,750. 

What is straight-line depreciation?Straight line depreciation is the most common and straightforward method for breaking up the cost of a capital asset.It can be estimated by simply dividing the asset's cost (less salvage value) by its usable life.

How to calculate gain/loss using straight line depreciation method?

given values are,

cost of asset = $31000

cost residual value = $2000

useful life of year = 4

sold on December 31, 2023, for $10,000.

straight-line depreciation = cost of asset - Salvage price/Year of estimated useful life

(31,000-2,000)/4 = 7,250

Carrying value as on 31st December 2023:

31,000-(7,250*3) = 21,750

21,750 - 10,000- 2,000 = 9,750

Using the straight line depreciation method, if the asset is sold for $10,000 on December 31, 2023, the gain is $9,750. 

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you find two properties that have sold twice within the last two years. property a sold 22 months ago for $98,500; it sold last week for $108,000. property b sold 20 months ago for $105,000; it sold two weeks ago for $113,500. assuming no compounding, what is the average monthly rate of change in sale prices?

Answers

The monthly average rate of change in sale prices is 0.42%.

Building A: $108,000 / $98.500 = 1.096447

: $113,500/$105,000 = 1.08095 for property B

Briefing:-

Average month-to-month growth without compounding

Property A: 0.00438 (0.096447) / 22

Property B: 0.08095/20 = 0.00405 and 0.00843/2 =.004215, respectively, or 0.42%

compounding monthly average growth:

Property A: 1.004194 or 0.004194 is equal to 1.096447(1/22)

Property B: 0.008094/2 =.004047 or 0.40% 1.08095(1/20) = 1.00390 or 0.00390

What is a functionally obsolete item?

Another instance of functional obsolescence in the technology sector is the parade of continually changing cellphones and the advancement of smartphone technology. The capabilities and functionalities of new cellphones have rendered their predecessors practically useless.

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f real income has risen by 3 percent, the interest rate is 2 percent and nominal income has risen by 3 percent, what is inflation?

Answers

The inflation is 0% when real income has risen by 3 percent, the interest rate is 2 percent and nominal income has risen by 3 percent.

What is inflation?

A rise in prices is referred to as inflation, which is also known as the gradual loss of purchasing power. The average price increase of a basket of chosen products and services over a certain period of time can be used to gauge the rate at which buying power is Deflation. A unit of money now effectively buys less than it did in earlier periods due to price increases, which are frequently stated as inflation. Deflation, on the other hand, contrasts inflation by resulting from a drop in prices and a gain in purchasing power.

Individual product price inflation over time are simple to track, but human requirements go beyond the scope of just one or two things.

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: introduction of new products causes the cpi to overstate the true, realized inflation rate because:

Answers

Introduction of new products causes the cpi to overstate the true, realized inflation rate because of new product bias.

The quality/new goods bias makes inflation calculations overestimate the genuine rise in cost of living over time because it ignores improvements in the quality of already-existing items and the creation of new goods.

The issue of quality bias is connected to the new product bias. Because of their greater features, new and upgraded items frequently cost more. Theoretically speaking, these upgrades shouldn't result in a consumer-facing net price rise.

New medical procedures and more energy-efficient central air conditioners are two examples of things that raise living standards. Although challenging, accounting for this shift in quality is nevertheless required. Hence, increase in inflation rate.

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on december 31, 2023, vivid corporation prepared adjusting entries that included the following items: depreciation expense: $30,000. accrued sales revenue: $28,000. accrued expenses: $20,000. used insurance: $8,000; the insurance was initially recorded as prepaid. rent revenue earned: $6,000; the rent was initially prepaid by the tenant and credited to unearned rent revenue. if vivid corporation reported pretax income of $220,000 prior to the adjusting entries, how much is vivid's pretax income after the adjusting entries?

Answers

After the adjusting entries, Vivid Corporation's pretax income would be $266,000.

This is calculated by taking the original pretax income of $220,000 and adding the adjusting entry amounts of $30,000 (depreciation expense), $28,000 (accrued sales revenue), $20,000 (accrued expenses), ($8,000) (used insurance), and $6,000 (rent revenue earned). This brings the total to $266,000.

Pretax earnings are a company's income left over after all operating expenses, including interest and depreciation, have been deducted from total sales or revenues, but before income taxes have been subtracted.It is  is a company's income after all operating expenses, including interest and depreciation, have been deducted from total sales or revenues.

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Question 13 Controlling precedents are binding authorities.
True
False

Answers

Binding Authorities-Controlling precedents in a jurisdiction are referred to as binding authorities. A binding authority is any source of law that a court must follow when deciding a case. TRUE

precedents that have been deemed to be controlling in a certain area of law. A court must adhere to when making a decision. Constitutions, laws, and regulations that apply to the matter at hand are examples of binding authority, as are court judgments that set the legal precedents for the area. Binding authority, also known as mandatory authority, describes decisions, laws, or rules that a court is required to abide by because they are binding on the court. Cases, laws, or rules that are persuasive but which the court is not required to follow are referred to as persuasive authority. a legal authority that a judge must consider while rendering a decision in a case. For instance, a judge must follow laws from the same state where the case is being brought or rulings from higher courts.

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a project under consideration has an internal rate of return of 13% and a beta of 0.6. the risk-free rate is 8%, and the expected rate of return on the market portfolio is 13%. a. what is the required rate of return on the project? (do not round intermediate calculations. enter your answer as a whole percent.) b. should the project be accepted? c. what is the required rate of return on the project if its beta is 1.60? (do not round intermediate calculations. enter your answer as a whole percent.) d. if project's beta is 1.60, should the project be accepted?

Answers

a. 11%  is the required rate of return on the project.

b. With an IRR of 15%, the project should be accepted.

c. 21%  is the required rate of return on the project if its beta is 1.60.

d. Required rate of return is greater than the project IRR. You should now reject the project.

The internal rate of return (IRR), a statistic used in financial research, is used to determine the profitability of potential investments. IRR is a discount rate that brings all cash flows' net present values (NPV) to zero in a discounted cash flow analysis. The NPV and IRR computations both use the same formula.

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Help Which of the following would not be used in preparing a cash budget for October? Multiple Choice Budgeted salaries expense for October. Estimated depreciation expense for October. Budgeted capital equipment purchases for October. Beginning cash balance on October 1 Budgeted sales and collections for October

Answers

The correct answer is b. Estimated depreciation expense for October. The balance sheet shows accumulated depreciation, while the income statement shows depreciation expense.

A fixed asset's share that has been deemed consumed in the current period is subject to depreciation expense. The cost is subsequently added to the expense list. With this charge, the carrying amount of fixed assets will be steadily decreased as their value is depleted over time. The cost of depreciating a company's assets over a specific time period is known as a depreciation expense (e.g,, quarter or the year). On the other hand, accumulated depreciation is the total amount that a business has already depreciated its assets. Depreciation is regarded as an expense for accounting reasons because it increases a company's operating costs. Machines and other assets undergo wear and tear over the course of their useful lives and lose value as a result. The expense of depreciation is shown on the income statement.

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Which of the following statements is correct regarding mixed economy?ABoth, the market and state, provide goods and services.BThe state owns the factors while the private sector handles the distribution.CThe market owns the factors, but the state regulates their usage.DThe government decides how goods are to be produced and distributed.

Answers

A) The true definition of a mixed economy is one in which both the market and the government provide goods and services.

What exactly is a mixed economy?

A system with elements of both capitalism and socialism is referred to as a mixed economic system. In a mixed economy, private property is protected and there is some economic flexibility in how money is used, but governments are also free to meddle in the market in order to further their social objectives.

The neoclassical theory claims that mixed economies are less efficient than pure free markets, but proponents of government interventions contend that the fundamental requirements for efficiency in free markets, such as equal information and rational market participants, cannot be realized in real-world applications.

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Business may be segmented by all of the following except Oa. time period Ob. region Oc. customer type Od product line

Answers

The correct answer is a. time period. Business Period refers to the time frame that is a part of the Business Cycle and is made up of either four or five calendar weeks, depending on the situation.

Any time frame used for financial reporting is referred to as an accounting period. The statements or reports for a certain accounting period include transactions that occurred within a specified calendar range. A reporting or accounting period frequently lasts for a full year. For various company responsibilities, there could be numerous accounting periods. The accounting year, also known as the accounting and reporting time periods, is a common word used in finance to describe a period of time. Depending on the inclination of the business and owners, these intervals can be quarterly, semi-annually, annually, or at any other time. They are usually established by historians after the era has passed. They are extensive and range in length from hundreds to thousands of years.

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desk costs $195 in the united states. the same desk costs 150 british pounds. if purchasing power parity holds perfectly, what is the exchange rate in dollars per pound quzilet

Answers

Answer:1.3

Explanation:

According to PPP, countries' exchange rates are in equilibrium when their purchasing power is the same, which means that their exchange rates should be equal to the ratio of their price levels.

Cost of goods in country A divided by cost of goods in country B equals purchasing power, or $195 divided by £150, or 1.3 dollars per pound.

What is 1 lb to a US dollar?

The current exchange rate for one British pound is 1.1901 USD.

How does the pound compare to the dollar right now?

The GBPUSD exchange rate today is (1.2271) in comparison to the GBPUSD rate yesterday (1.21555).

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which financial institution can issue loans but cannot accept deposits? finance company or insurance company

Answers

Finance company can issue loans but cannot accept deposits.

An organization that lends money to people and businesses is a finance company. A finance firm, unlike a bank, does not accept customer cash deposits and does not offer certain banking services like checking accounts.

Customers of finance businesses can borrow money from them, and their interest rates are often higher than those of banks. Finance corporations make money from this loan interest. Many consumers turn to financing companies for loans because of their low credit histories. These borrowers provide collateral to secure their loans, generally by promising to deliver important personal assets to the lender in the event that the loan is not returned.

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