Why have short term loans or lines of credit available?
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Even if a company has experienced positive cash flow for a number of years, why should it plan for and have the ability to quickly secure short-term loans such as a line of credit?
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Solution Summary
In 276 words, the solution lists seven reasons why business organizations should have short term or a line of credit available.
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There are several reasons why a company should have a credit line approved and available for draw down:
1. A line of credit that is available but not used is very cheap. There is only a set up fee and no interest when it has not been drawn.
2. There could be unusual or unknown circumstances that could make a line of credit a quick way to secure funds. These could include ...
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