Corporate Finance: Loans, Credit, and Collateral
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A) What are some advantages to borrowing short term?
B) Is collateral a means for affecting interest rate?
C) What are some advantages and disadvantages of having a bad credit vs good credit in terms of getting a loan?
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Solution Summary
This solution discusses the advantages of borrowing short term and having good credit, and explains how collateral affecting the interest rate of a loan.
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A) Advantages to borrowing short term include a lower interest rate, you can leverage the short-term loan to make a profit within a year, and short-term loans are easier to get approved for than a long-term loan.
B) Definitely, collateral is a means for effecting the interest rate granted to you; especially if the ...
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