A single-payment loan used to finance a purchase when the cash to be used for repayment is known to be forthcoming in the near future is a form of:
A) a collateral note.
B) interim financing.
C) cumulative borrowing.
D) a loan rollover.
E) a loan extension.

Question

Quizplus · Accepted Answer

Interim financing is a form of short-term financing used to bridge the gap between the receipt of funds and the payment of expenses. In this case, the borrower knows they will have the funds to repay the loan in the near future, making it an appropriate use of interim financing. The other options are not as relevant to this scenario.

A Single-Payment Loan Used to Finance a Purchase When the Cash