Forms of Short-term Financing/Activities
Activity
editTake the following financing options and group them together in similar risk groups and then rate them according to risk level starting with the highest risk for the seller moving to the lowest risk. This particular risk rating will correspond to the lowest risk for the buyer moving to the highest risk to the buyer.
HIGHEST RISK | ------------------------> | LOWEST RISK |
---|---|---|
SELLER LOWEST RISK | <------------------------ | BUYER HIGHEST RISK |
Bankers acceptances
Bank financing
Commercial Letter of Credit
Documentary collections
Ex-Im Bank
Export credit insurance
Factoring
Forfaiting
Personal resources
SBA
Standby letters of credit
Transferable letters of credit
Vendors
After ranking the risk, provide the minimum requirements necessary for the seller to utilize each form of financing and their associated costs.
Answer
editHIGHEST RISK | ------------------------> | LOWEST RISK |
---|---|---|
SELLER LOWEST RISK | <------------------------ | BUYER HIGHEST RISK |
Vendors Personal resources Bankers acceptances Ex-Im Bank Forfaiting |
Commercial Letter of Credit Bank Financing Transferable letters of credit SBA |
Documentary Collections Standby letters of credit Export credit insurance Factoring |