--%>

Why banks make short-term or self-liquidating loans

Banks desire to make short-term, self-liquidating loans to businesses. Why?

Banks desire to be able to illustrate where the funds are likely to come from such that the borrower is capable to employ to make the required loan payments. Short term, self-liquidating loans do this as the borrowed funds are utilized to purchase assets that produce the needed funds.

 

   Related Questions in Finance Basics

  • Q : What is Reference Code Reference Code :

    Reference Code: A three-digit code recognizing whether the item is from the Budget Act or some other source (example, legislation), and its character (example, state operations). This is the middle segment of the budget item or appropriation number.

  • Q : What is Finance Conversion Code listing

    Finance Conversion Code (FCC) Listing: This is a listing distributed by the State Controller's Office to the departments each spring, that is based on departmental coding updates, will state how the salaries and wages detail will be d

  • Q : Describe the status of cyclically

    Assume the full-employment, non-inflationary level of real output is GDP3 (not GDP2). If the economy is operating at GDP2 instead of GDP3, describe the status of its cyclically adjusted budget? The status of its present fiscal polic

  • Q : Near-term policy Normal 0 false false

    Normal 0 false false

  • Q : Disadvantages of the Finger print

    Disadvantages of the Finger print technique: Health concerns while touching the sensor which is being touched by many number of individuals. Sometimes due to age and occupation may cause some diff

  • Q : Why riskiness of portfolios is

    Normal 0 false false

  • Q : Describe capital rationing Describe

    Describe capital rationing? Should a firm practice capital rationing? Why? Capital rationing is the practice of setting dollar restriction on what will be invested in new capital budgeting projects. Proprietorships, partnerships and private c

  • Q : What are the Changes in Authorized

    Changes in Authorized Positions (“Schedule 2”): This is a schedule in the Governor’s Budget which reflects staffing changes made following to the adoption of the present year budget and enacted legislation. This planned document modi

  • Q : Finance associated to the fields of

    How is finance associated to the fields of economics and accounting?

  • Q : Explain Planning Estimate Planning

    Planning Estimate (PE): A document employed to record and monitors those present and budget year expenditure adjustments comprising budget change proposals accepted for inclusion in the Governor's Budget. PEs is broken down by department, character, f