Section A

VertiFarm Co operates a network of urban vertical farms. It is experiencing cash flow difficulties due to slow-paying supermarket clients. The finance director is considering either factoring or invoice discounting.

Which of the following statements correctly distinguishes between factoring and invoice discounting?

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

Invoice discounting is always provided on a non-recourse basis, whereas factoring is always with recourse.

Factoring is confidential and customers are unaware of the arrangement, whereas invoice discounting is disclosed to customers.

Invoice discounting provides bad debt protection, whereas factoring only provides an advance on cash.