Short-term, self-liquidating loans are intended to ________.
A) provide one-time loan to the borrower who needs funds for a specific purpose
B) cover seasonal peaks in financing caused by inventory and receivable buildups
C) provide maximum amount to the firm that it can owe to the bank
D) recapitalize the firm

Question

Quizplus · Accepted Answer

Short-term, self-liquidating loans are specifically designed to cover temporary financing needs, such as those caused by seasonal increases in inventory or receivables. These loans are expected to be paid off as the business cycle completes, for example, when inventory is sold or receivables are collected.

Short-Term, Self-Liquidating Loans Are Intended to ________