Self-liquidating loans are intended merely to carry a firm through seasonal peaks in financing needs that are due primarily to buildups of accounts receivable and inventory.

Question

Quizplus · Accepted Answer

Self-liquidating loans are indeed designed to help firms manage their cash flow during seasonal peaks in financing needs, which often occur due to increased inventory and accounts receivable. These loans are meant to be repaid using the funds generated from the increased sales during the seasonal peak, making them a self-liquidating form of financing.

Self-Liquidating Loans Are Intended Merely to Carry a Firm Through