A short-term loan which is secured by inventory that is held in trust is referred to as:
A)a blanket inventory lien.
B)a secured line of credit.
C)a banker's acceptance.
D)a trust receipt financing arrangement.
E)field warehousing financing.

Question

Quizplus · Accepted Answer

A trust receipt financing arrangement is a short-term loan that is secured by inventory that is held in trust. The borrower pledges the inventory as collateral, and the lender releases the funds to the borrower to purchase more inventory. The borrower then holds the inventory in trust for the lender until the loan is repaid. This type of financing is commonly used for international trade transactions.

A Short-Term Loan Which Is Secured by Inventory That Is