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Compensating Balances Are Frequently a Part of Revolving Lending Arrangements

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Essay

Compensating balances are frequently a part of revolving lending arrangements with banks,yet they add to the cost of financing for the borrower. Why,then,would borrowers agree to such terms?
What other types of financing are there that the firm could use as an alternative?


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Obesity

A medical condition characterized by excess body fat that poses a risk to health.

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A progressive neurological disorder characterized by memory loss, cognitive decline, and personality changes, caused by the accumulation of amyloid plaques and neurofibrillary tangles in the brain.

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Alterations in the body's chemical processes that convert food into energy, which can affect health and bodily functions.

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A region of the brain that regulates various autonomic nervous system functions, including temperature control, thirst, hunger, sleep, mood, and sexual desire.

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