A business that needs short-term credit in excess of its regular line of bank credit may:

Question

Quizplus · Accepted Answer

Pledging accounts receivable as specific collateral is a common method for obtaining short-term credit in excess of regular bank credit. This allows the business to use its accounts receivable as collateral for the additional loan, providing security for the lender. Option A is not a common method of obtaining short-term credit, and option B would require significant legal arrangements. Option C may not be feasible if the business already has a high level of regular line of bank credit.

A Business That Needs Short-Term Credit in Excess of Its