A Small Business That Uses Factoring

Multiple Choice

A small business that uses factoring:

A) pledges its accounts receivable as collateral to obtain a loan from a financial institution.
B) relies on a third-party consultant to apply for SBA-guaranteed loans.
C) sells its accounts receivable to a third party to get the capital it needs.
D) borrows money from lenders by offering them the option to convert the loan into stock in the company.