A Credit Line on Which a Borrower Can Both Draw

question 29

Multiple Choice

A credit line on which a borrower can both draw and repay many times over the life of the loan contract is called a:

• A)reviving loan
• B)revolving loan
• C)refilling loan
• D)A credit line does not exist.

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Definitions:

Debt Financing

A method of raising capital through the borrowing of money, typically involving the issuance of bonds or taking out loans.

Equity Financing

The act of raising capital through the sale of shares in a company, providing investors with part ownership.

Diversify

The strategy of allocating investments or resources across a variety of different areas to reduce risk.

504 Loan Program

A Small Business Administration program that provides long-term, fixed-rate financing to small businesses for major fixed assets, such as land and buildings.