Shameika Olson owns a bookstore and has arranged a business loan with the bank where she has her business account. The terms of the loan allow her to borrow up to $12,000 within the next year. She must pay interest only on the unpaid loan balance. What has Olson arranged?
A) line of credit
B) secured loan
C) collateralized loan
D) mortgage loan

Question

Quizplus · Accepted Answer

Olson has arranged a line of credit, which is a type of loan that allows the borrower to withdraw funds as needed up to a certain limit and only pay interest on the amount borrowed. This type of loan is commonly used by businesses for short-term financing needs.

Shameika Olson Owns a Bookstore and Has Arranged a Business