Renita works as a freelancer. She wants to start her own business, but she does not have the required funding. To meet the working capital for her business, she takes a short-term loan from a bank. The bank agrees to provide her funding up to $50,000, as and when she needs it. However, she can repay the amount immediately or over a pre-specified period of time. Which of the following short-term financing sources does Renita utilize to fund her business in the given scenario?
A) Line of credit
B) Trade credit
C) Commercial paper
D) Factoring

Question

Quizplus · Accepted Answer

Renita utilizes a line of credit, which allows her to borrow up to a specified limit ($50,000) as needed and repay it over time.

Renita Works as a Freelancer