Charges & Pricing check0 / 1 answered · 0 correct
Check 1
What should you ask besides the headline financing percentage?
Discounting and Financing Pricing
Turn a future receivable into today’s cash — and understand the price.
Base funding cost
A financier starts with its own cost of funds or reference pricing for the relevant currency/tenor.
Credit spread
Issuer, buyer, guarantor or obligor risk affects the margin added for credit exposure.
Time
A 30-day receivable and a 360-day receivable are economically different. Discount calculations depend on tenor and day-count conventions.
Fees and recourse
Arrangement, processing, commitment and legal costs may apply. Whether financing is with or without recourse changes the risk allocation.
Standards / source note: Bank charges and pricing are transaction-specific. Obtain the current tariff or quote from the banks involved; ICC rules do not set universal fee levels.
Remember this“80% LTV” or “5% fee” is not enough information to understand a financing proposal.
Finished this lesson?
Mark it complete. Your progress stays on this device.