Well over half of all bank commercial
loans are made for a short term, that is, for period of less than one year. Of
these loans, about half are made on an unsecured basis to seasonal businesses
and to borrowers with short-lived and project-oriented needs for funds. Secured
short-term borrowers typically are less strong financially or are untested
businesses without an earnings record. The most common type of short-term loan
is the working capital line of credit extended to financially strong borrowers
who have seasonal swings in their operations. Retailers and seasonal
manufacturing firms are regular users of such credit. Through the line-of-credit
commitment, a bank indicates its intention to honor borrowings up to the amount
of the line. The amount is established on the basis of the customer's proforma
peak funding requirement, and it assures the borrower of the availability of
funds to finance bulges in working capital as sales expand and contract. The
line of credit facility is very flexible and overcomes the need to extend a
series of separate short-term loans. The customer "takes down" only parts of the
line as the need arises, so that redundant borrowings are unnecessary. Loan
interest is charged on only the amount actually borrowed, and the loan may be
repaid as reflows of cash to the firm occur when seasonal sales
decline.
单选题
The periods of short-term loan is less than one year.
【正确答案】
A
【答案解析】第一段第一句Well over half of all bank commercial loans are made for a short term, that is, for period of less than one year.可以看出。
单选题
Loan interest is charged on only the amount actually borrowed.
【正确答案】
A
【答案解析】文中最后一句Loan interest is charged on only the amount actually borrowed...可以找出答案。
单选题
In quite a few instances, line-of-credit borrowing is unsecured.
【正确答案】
C
【答案解析】文中第二句仅说Of these loans，about half are made on an unsecured basis to seasonal businesses and to borrowers with short-lived and project-oriented needs for funds.但并没有指出贷款额度没有保证，更没有举出例子说明。