In relation to long-term financing,a fully drawn advance is a:
A) a bank loan advanced for a precise period for an unspecified purpose.
B) A term loan where the full amount is provided at the start of the loan, usually for a specified purpose.
C) A term loan where the borrower has the option of putting its operating account in deficit up to an agreed limit.
D) A term loan where the bank does not pay out the loan until after a specified period.

Question

Quizplus · Accepted Answer

A fully drawn advance is a term loan where the full amount of the loan is provided at the start of the loan, usually for a specified purpose. This means that the borrower receives the entire loan amount upfront and then makes repayments over the term of the loan. Therefore, option (B) is the correct choice. Options (A), (C), and (D) do not accurately describe a fully drawn advance.

In Relation to Long-Term Financing,a Fully Drawn Advance Is A