The Wabash Washing Machine Company has arranged to get a loan from their bank over the next five years.They can borrow up to a pre-specified limit and repay it as many times as they need until the loan matures.The Wabash Washing Machine Company has not pledged any specific collateral for this loan.What type of loan is this most likely to be?

Question

Quizplus · Accepted Answer

Revolving credit financing allows the borrower to borrow up to a pre-specified limit and repay it as many times as they need until the loan matures, which fits the description given in the scenario. Additionally, the fact that no specific collateral is pledged suggests that this is an unsecured loan, which is commonly associated with revolving credit financing. Therefore, option B is the most likely choice.

The Wabash Washing Machine Company Has Arranged to Get a Loan