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16.07.2022 - 17:38

A committed line of credit: guarantees that a set amount of funds will be available to a firm for a stated period of time regardless of events that might occur during that time period. is a guarante

Question:

A committed line of credit:

guarantees that a set amount of funds will be available to a firm for a stated period of time regardless of events that might occur during that time period.

is a guarantee that a bank will purchase a firm’s accounts receivable at full value.

provides greater assurance than a non-committed credit line that funds will be available when needed by a firm.

guarantees that any funds borrowed during a stated period of time will be charged the lowest rate of interest the lending bank offers to any of its customers.

is a loan arrangement for a stated period of time which is free of all costs and fees other than the actual interest paid on the funds borrowed.

Answers (0)

Jan April 2, 2023 в 13:31

A committed line of credit provides greater assurance than a non-committed credit line that funds will be available when needed by a firm. This means that a committed line of credit is a type of loan arrangement where a set amount of funds is guaranteed to be available for a specific period of time, regardless of any events that may occur during that period. This includes situations such as economic downturns, market fluctuations, or other unforeseen events that could impact a company's ability to access funds. In contrast, a non-committed credit line does not offer the same level of assurance, as the lender may choose not to extend credit at any given time. Therefore, a committed line of credit is a more reliable and secure option for businesses that require regular access to funds for ongoing operations.

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