Jim is a refrigeration electrician.He has a large contract starting soon and knows he will run short of cash in purchasing supplies.However,he expects the client to begin making payments for his work two weeks after he begins.What financing arrangement would be best for Jim to arrange with his bank?
A) open a line of credit
B) increase his mortgage
C) issue a credit card
D) take out an operating loan

Question

Quizplus · Accepted Answer

Opening a line of credit would allow Jim to access the necessary funds for purchasing supplies while he waits for payment from his client. This would give him flexibility in borrowing only what he needs and paying interest only on what he borrows. It would also allow him to continue to borrow and repay funds as needed throughout the duration of the project. Increasing his mortgage or issuing a credit card may not provide the best terms or flexibility, and taking out an operating loan may not be necessary if he only needs short-term financing.

Jim Is a Refrigeration Electrician