A petroleum exploration company takes a short-term bank loan in order to finance the purchase of several truck-mounted,vibroseis shakers,which have unexpectedly come onto the market at a good price.Once the purchase is made,the company will obtain long-term financing.Which of the following best describes the short-term loan the company has taken?

Question

Quizplus · Accepted Answer

The company has taken a bridge loan, which is a short-term loan taken by a borrower until they can secure long-term financing. In this case, the company needs the funds quickly to purchase the vibroseis shakers and plans to obtain long-term financing later.

A Petroleum Exploration Company Takes a Short-Term Bank Loan in Order