Which kind of short-term financing is likely to be used by a small firm with average credit?
A) Bank loan
B) Commercial paper
C) Bankers' acceptance
D) Money market instrument

Question

Quizplus · Accepted Answer

Small firms with average credit are more likely to use bank loans for short-term financing because banks are more willing to lend to smaller businesses with less-than-perfect credit compared to the markets for commercial paper, bankers' acceptances, and other money market instruments, which typically require higher credit ratings.

Which Kind of Short-Term Financing Is Likely to Be Used