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What Type of Loan Allows a Borrower to Maintain a Compensating

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What type of loan allows a borrower to maintain a compensating balance at the bank instead of putting up collateral?


Definitions:

Disclosure Note

Supplementary information provided in financial statements, explaining the basis for certain accounting policies, detailing specific financial figure backgrounds.

Probable Loss

An anticipated financial loss that is likely to occur because of existing conditions or events.

Balance Sheet

A financial statement that displays a company's assets, liabilities, and stockholders' equity at a specific point in time.

Working Capital

The difference between a company's current assets and current liabilities, indicating its short-term financial health.

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