Examlex
Fill in the correct labels for the following figure using the word bank below.
-G _________
Guaranteed Line
A credit line that is assured to be available to the borrower by the lender, typically used to ensure liquidity for businesses.
Compensating Balances
Minimum cash balances that a business agrees to maintain in its account as part of a loan agreement, often used to reduce the lender's risk.
Pledging Agreement
An agreement where a borrower pledges an asset as collateral to secure a loan, ensuring the lender can seize the asset if the loan defaults.
Warehousing
In finance, a method of securing the lender’s interest when borrowing is secured by inventories. The inventory is placed in a warehouse operated by a third party. When it is drawn out of the warehouse by the borrower, a pro rata share of payment on the loan is due.
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