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To the excellent answers here, I would add that cloth merchants before the industrial revolution would have aggregated the production of large numbers of suppliers and delivered products to large numbers of purchasers, including foreign purchasers. This put them in a position where they naturally ended up doing considerable amounts of factoring. From ...


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Because it is non-perishable, cloth makes good collateral. Lenders like to have something to use for security. Land might serve this purpose, but it was monopolized by the nobility. The (middle class) "merchants" had few hard goods to put up as security for a loan, but one of them was their "stock in trade." If they didn't repay, the lender would liquidate ...


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