Asked by David Williams on Jul 23, 2024
Verified
A short-term loan secured by the borrower's inventory, either directly or via an intermediary, is called a (n) ____________________.
A) Debenture.
B) Line of credit.
C) Banker's acceptance.
D) Banker's acceptance
E) Inventory loan.
Inventory Loan
A loan that is secured by the inventory of the borrower, providing companies with the capital needed to purchase products for sale.
Debenture
Unsecured debt, usually with a maturity of ten years or more.
Line Of Credit
An arrangement between a financial institution and a customer that establishes a maximum loan balance that the borrower can access.
- Understand various inventory financing structures and their effects on companies.
Verified Answer
KS
Kalla SubodhJul 25, 2024
Final Answer :
E
Explanation :
An inventory loan is a short-term loan secured by the inventory of the borrower. This type of loan provides businesses with the capital needed to purchase products for sale before revenue is generated from sales.
Learning Objectives
- Understand various inventory financing structures and their effects on companies.