Factoring companies take on what risk when purchasing accounts receivable?

Factoring companies primarily take on the risk of the seller defaulting when they purchase accounts receivable. This risk stems from the fact that the factoring company is essentially buying the right to collect payments on those receivables. If the seller's customers fail to pay their invoices (for instance, due to bankruptcy or other financial difficulties), the factoring company may not recover the amount it has paid for the receivables. This risk is fundamental to the business of factoring and is a key consideration when factoring companies assess which receivables to purchase, as they have to evaluate the creditworthiness of the sellers' customers.

The other options relate to different types of financial risks, but they do not directly connect to the core risk faced by factoring companies regarding receivables. Market fluctuations and interest rate increases can affect many financial sectors but don't specifically pertain to the risk of accounts receivable default. Similarly, stock devaluation may impact investors but is not relevant to the operational risks associated with factoring receivables.