Which of the following is a listed benefit of discounting in equipment finance?

• A. Lower upfront commission, less credit risk, and no servicing responsibility.
• B. Higher upfront commission, more credit risk, and providing servicing responsibility.
• C. Higher upfront commission, less credit risk, and no servicing responsibility.
• D. Higher upfront commission, less credit risk, and outsourced servicing.

Answer: (C)

Discounting involves selling the equipment finance contract to a financier so you receive cash upfront. The key benefit is that you get a higher upfront payout (the commission), you transfer credit risk to the purchaser, and you no longer handle servicing since the purchaser or their servicer takes over collections and administrative duties. That combination—more cash now, less risk on your end, and no servicing responsibility—fits the described option exactly. Lower upfront cash wouldn’t align with discounting’s incentives, taking on more credit risk isn’t beneficial, and while servicing could be done by someone else, the clear advantage described is having no servicing duty on your part.