Short-term working capital loans are generally repaid with funds from:

Question

Quizplus · Accepted Answer

Short-term working capital loans are meant to be used to cover short-term needs such as inventory and receivables. Therefore, the best way to repay such loans would be through reducing inventory and receivables, as this would free up the funds needed to repay the loan. Repaying the loan through investing cash flows or issuing new equity or debt would not be ideal, as these options may not align with the short-term needs that the loan was meant to cover. Redeeming marketable securities would also not be a suitable option, as this would involve selling off assets to generate cash, which may not be feasible or practical in the short term.

Short-Term Working Capital Loans Are Generally Repaid with Funds From