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)collateral security
B)interim financing
C)cumulative borrowing
D)loan rollover
E)loan extension

Question

Quizplus · Accepted Answer

This type of loan is known as interim financing because it is intended to be paid off with funds that are expected in the near future. It is a short-term solution that bridges the gap between the need for funds and the availability of those funds. This type of loan is often used in situations where a borrower has a pending sale or is expecting a tax refund or other sources of cash in the near future. It is not considered collateral security, cumulative borrowing, loan rollover, or loan extension.

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