Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
7th Edition
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Chapter7: Using Consumer Loans
Section: Chapter Questions
Problem 2LO: Identify the various sources of consumer loans.
Related questions
Question
Write some of the examples of commercial loans?
Expert Solution
Step 1
Following are the examples of commercial loans:
- Term loan: A term loan is an advance from a bank that has a set reimbursement period and either a fixed or floating interest rate for a given sum. For a current private venture with sound fiscal reports, a term loan is consistently satisfactory.
Step 2
- Letter of credit: A letter of credit, or "credit letter," is a letter from a bank that ensures that a purchaser's installment to a merchant will be paid on schedule and for the proper sum. Should the buyer be not able to make an installment on the buy, the bank would be compelled to cover the entire or lingering buy aggregate. This can be given as an arrangement.
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