One common arrangement that allows firms to borrow, repay, and re-borrow over a specified period of time as their cash needs vary is called:

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Revolving credit is a type of loan agreement that allows the borrower to repeatedly draw or withdraw from an available credit line up to a specified limit. The borrower only pays interest on the amount borrowed and can re-borrow as they repay. This arrangement is ideal for firms with fluctuating cash needs who want to maintain a regular source of credit. Bridge loans and term loans, on the other hand, are usually used for specific short-term purposes and do not offer the same flexibility as revolving credit.

One Common Arrangement That Allows Firms to Borrow, Repay, and Re-Borrow