Which of the following statements does NOT accurately describe a line of credit?

a. A line of credit is available immediately when needed.

b. A line of credit provides an alternative source of funds if an emergency does develop.

c. A line of credit can be obtained at a credit union, savings and loan association, or bank.

d. A line of credit is already approved before the money is actually needed.

e. A line of credit is a long-term loan.

Question

Kieran Montes

Business

27 November, 13:02

Which of the following statements does NOT accurately describe a line of credit?

a. A line of credit is available immediately when needed.

b. A line of credit provides an alternative source of funds if an emergency does develop.

c. A line of credit can be obtained at a credit union, savings and loan association, or bank.

d. A line of credit is already approved before the money is actually needed.

e. A line of credit is a long-term loan.

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Answers (1)

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Chipper · Answer 1

A line of credit is already approved before the money is actually needed does NOT accurately describe a line of credit.

Option d

Explanation:

In a business scenario the credit plays an important contribution for the output of the business. The lending from the banking institution is considered as the credit facility available for the business.

Based on the performance of the company or business the bank will analyse the payment promptness of acquired loan by the firm and then would allow them to avail the Line of credit which is pre-approved loan sanctioned to the firm's current account.

The firm use this limit wherever required and repay the amount along with interest and they can make of the limit as and when required.