Which of the following statements is correct?
A) Operating loans are long-term financing arrangements.
B) Operating loans are typically secured by accounts receivable and inventory.
C) Operating loans are only available to large institutions with excellent credit ratings.
D) Banks generally offer an operating line for 100% of accounts receivable less than 90 days and 100% of the company's inventory value.

Question

Quizplus · Accepted Answer

Operating loans are typically short-term financing arrangements used by businesses to finance their day-to-day operations. They are often secured by the company's current assets, such as accounts receivable and inventory, to mitigate the lender's risk.

Which of the Following Statements Is Correct