Section A

CloudSync, a rapidly growing B2B Software-as-a-Service (SaaS) startup, is experiencing cash flow constraints due to long customer payment terms. The finance director is considering either factoring or invoice discounting.

Which of the following is a key difference between factoring and invoice discounting?

Invoice discounting provides bad debt protection (non-recourse), whereas factoring never does.

Factoring usually includes the administration of the sales ledger, whereas invoice discounting does not.

Invoice discounting is always disclosed to the customer, whereas factoring is confidential.

Factoring is only available for short-term export sales, whereas invoice discounting is for domestic sales.