Which financing method is associated with retaining the customer relationship?

Which financing method is associated with retaining the customer relationship?

• A. Broker
• B. Equity/Debt funding
• C. Discounting
• D. Securitization

Answer: (C)

Retaining the customer relationship means the original lender or lessor continues to service the account and interact with the customer after funding. Discounting fits because the funder purchases the receivable at a discount but the seller (the original lender) typically keeps servicing the loan and handling customer interactions. The customer continues to deal with the same company for payments, support, and account management, so the relationship remains intact. Other methods tend to shift or end that direct contact: a broker mainly arranges financing and the customer may end up dealing with a different funder; equity/debt funding brings in external investors who usually don’t service the customer; securitization moves receivables into a separate vehicle with servicing often done by a different servicer, reducing the original company’s direct interaction with the customer.

Retaining the customer relationship means the original lender or lessor continues to service the account and interact with the customer after funding. Discounting fits because the funder purchases the receivable at a discount but the seller (the original lender) typically keeps servicing the loan and handling customer interactions. The customer continues to deal with the same company for payments, support, and account management, so the relationship remains intact.

Other methods tend to shift or end that direct contact: a broker mainly arranges financing and the customer may end up dealing with a different funder; equity/debt funding brings in external investors who usually don’t service the customer; securitization moves receivables into a separate vehicle with servicing often done by a different servicer, reducing the original company’s direct interaction with the customer.